Monday, 15 June 2020
Treasury Laws Amendment (2019 Measures No. 3) Bill 2019; In Committee
I was in the process of describing to Senator Lambie about government actions towards tax avoidance measures in the last few years. We got to the multinational anti-tax avoidance law. That particular law, as I mentioned before, applied from 1 January 2016. The result of the multinational anti-avoidance law, or the MAAL, is an additional $7 billion of sales revenue that has been booked in Australia already—large taxpayers that are bringing their Australian sourced sales back on shore.
The multinational anti-avoidance measure is designed to stop multinationals from artificially avoiding a taxable presence in Australia. Approximately $753 million in additional GST was paid in just the 2018-19 year as a result of some global entities restructuring in response to the multinational anti-avoidance measure. We have also in fact toughened that measure even further. That applied from 1 January 2016 and was expected to result in an unquantifiable gain to underlining revenue that prevented multinationals from using foreign trusts and partnerships in corporate structures that would seek to undermine the multinational anti-avoidance legislation and avoid the operation of the multinational anti-avoidance legislation.
The diverted profits tax, the DPT I described earlier, commenced on 1 July 2017. It is at this stage probably too early to tell the results of the diverted profits tax as it only applies to income years from 1 July 2017, but it's expected that the results of the DPT are largely around behavioural change. It's been estimated that the diverted profits tax will raise around $100 million every single year. The ATO DPT project team has been actively involved in identifying potential diverted profits tax risks.
The thin capitalisation, which is the valuation of assets and treatment of consolidated entities, program applies to new valuations that were made after the budget announcement. From 1 July 2019, all entities must rely on valuations that are in financial statement. The legislation was enacted on 13 September 2019. The thin capitalisation rules and the change to the thin capitalisation rules is expected to result in a gain to revenue of around $240 million over the forward estimates. The program tightens Australia's thin capitalisation rules by requiring entities to align the value of their assets for thin capitalisation purposes with the value that's included in their financial statements.
On top of that, this government has implemented a new application of GST on digital products and services. That was commenced in July 2017. The net GST revenue of $955 million was raised between 1 July 2017 and 31 December 2019. That GST applies to digital products and services that have been imported by Australian consumers. Collections to date have vastly exceeded expectations. On top of that, GST now applies on low-value imported goods. That GST commenced on 1 July 2018. The GST revenue from that program has raised around $556 million between 1 July 2018 and 31 December 2019. You will recall, before this time GST didn't apply to goods that had been imported that were beneath $1,000 in value. Of course, that was an enormous disadvantage in this increasingly digitised age for those high-street shops that were competing with online businesses, and particularly those from overseas. Electronic distribution platforms and goods forwarders became required to account for GST on sales of imported low-value goods with values of a $1,000 or less to consumers in Australia, and collections to date have vastly exceeded expectations. This government has efficiently and effectively been tackling multinational tax avoidance, transparency and accountability to companies of all sizes.
Ordered that the committee have leave to sit again on the next day of sitting.