Jane Hume (Victoria, Liberal Party, Assistant Minister for Superannuation, Financial Services and Financial Technology) Share this | Hansard source

Firstly, I would like to thank those senators who have contributed to this debate for the almost universal support for the intentions and mechanisms that are outlined in this legislation. The Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) Bill 2019 will help ensure Australia has a strong tax system where everyone, including multinationals, pays their fair share of tax. It will reinforce the ATO's armoury, as the coalition has done in the past with its multinational anti-avoidance legislation and diverted profit tax. It will also ensure that programs delivered through the tax system are effective and well targeted.

Schedule 1 to this bill will improve the integrity of Australia's thin capitalisation rules. Australia's thin capitalisation rules stop multinationals from claiming excessive debt deductions by placing unrealistically high levels of debt in their Australian operations. The bill strengthens the integrity of the thin capitalisation rules by improving the reliability of asset valuations used to support debt deductions. Multinationals will be required to align the value of their asset for thin capitalisation purposes with the values used in their financial statements. The bill will also ensure that foreign-controlled consolidated groups are recognised as inward-investing entities. This will confirm that these entities are not able to use the thin capitalisation tests that are appropriate only for outbound investors. The changes in schedule 1 of this bill build on the strong actions that the government has already taken to combat multinational tax avoidance and are expected to raise an additional $120 million per annum from 2020-21.

Schedule 2 to the bill levels the playing field for Australian hotel bookings by ensuring that offshore sellers of hotel accommodation in Australia calculate their GST turnover in the same way as local sellers from 1 July 2019. This measure follows the government's decision to extend the GST to digital products and other services from 1 July 2017 and to low-value imported goods from 1 July 2018.

Schedule 3 provides for the equal tax treatment of car refurbishments regardless of where the car is refurbished. It will ensure that, from 1 January 2019, luxury car tax will not be payable when cars are reimported into Australia following service, repair or refurbishment overseas.

I commend this bill to the Senate.

Question agreed to.

Bill read a second time.