Australia Revising ‘Significant Global Entity’ Definition

Australia Revising ‘Significant Global Entity’ Definition

The Australian Government is consulting stakeholders on a law that would extend the definition of a “significant global entity” to ensure multinational tax laws apply uniformly to all relevant entities.

The definition of “significant global entity” was originally devised to determine application of the OECD’s country-by-country reporting requirements, the Government noted, adding that the definition is now also used to determine application of the Multilateral Anti-Avoidance Law and the Diverted Profits Tax.

The Government, in the 2018-19 Budget, had announced that it would extend the definition to include members of large business groups headed by proprietary companies, trusts, partnerships, and investment entities.Currently, the definition only includes groups headed by listed companies and private companies required to prepare general purpose financial statements.

By extending the definition, the proposed legislation will ensure the multinational tax avoidance rules apply to all relevant entities, the Government said.

Australian Treasurer Scott Morrison said: “Many significant measures undertaken by the Turnbull Government to tackle multinational tax avoidance rely on the ‘significant global entity’ definition. This law will further reinforce the Government’s commitment to ensuring the integrity of Australia’s tax system.”

Comments must be received by August 17.

See Draft Legislation