Over 40 multinational enterprises (MNEs) have restructured their business operations in response to Australia’s crack down on MNE tax avoidance law, ATO Deputy Commissioner Mark Konza has said.
Speaking at the Tax Institute’s 2018 National Transfer Pricing Conference held in Sydney on August 8, 2018, Konza said that the ATO’s recent clamp down on MNE tax avoidance “has seen a large number of multinationals, including some of the biggest e-commerce players, changing the way they operate.”
In 2015, the Australian Government passed the Multinational Anti-Avoidance Legislation (MAAL) to tackle “operate here-bill overseas” arrangements that avoid the attribution of sales revenue to an Australian taxable presence to avoid tax.
Konza said that, in response to the MAAL, 44 MNEs have restructured their business operations in the country to date. “These taxpayers no longer characterize themselves as ‘service providers’ and now book their sales revenue in Australia,” Konza told the conference.
According to Konza, the MAAL has been a major victory for the Commissioner and industry members who have argued for cooperative approaches. “The implementation has seen a base restoration of nearly AUD7bn in assessable income and there has been no need for MAAL assessments to issue so far,” he said.
Konza said: “The implementation of the MAAL saw us take a new approach and put together a road map which invited taxpayers to actively engage with us. This brought taxpayers to the table and allowed us not only to help them move to more economically responsible structures, but helped us to settle old disputes, including transfer pricing matters.”
“The Australian Government and the ATO are committed to ensuring that MNEs pay the correct amount of tax under the law. As I hope I have demonstrated, even within a period of rapid change, the ATO has continued to balance a strategy of cooperation with all those seeking to comply with the law and a resolute response to those seeking to not comply,” he told the conference.