The Australian Government increases pressure on multinational tax avoidance: Diverted Profits Tax introduced

Tax Update

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The Australian Government has released draft legislation to implement a UK-style 40 per cent Diverted Profits Tax (DPT), with effect from 1 July 2017. Head of Tax Australia, Jock McCormack discusses these changes, and how multinational businesses can prepare.

The DPT targets 'significant global entities' (those with annual global income of AU$1 billion or more and Australian turnover of at least AU$25 million) which artificially transfer profits to offshore associates using arrangements entered into with a principal purpose of avoiding Australian tax, unless those arrangements have sufficient economic substance. 

To find out more, read our latest Australian Tax Update.