Budget Brief: Big Business
Following the UK’s lead, albeit via a different route, the government are seeking to tax approximately 30 multinationals by extending the existing anti-avoidance provisions.
The proposal seeks to include a new category of anti-avoidance schemes which are designed to limit a taxable presence in Australia. This is a highly complex area of law which will no doubt be considered in detail as the position evolves over time.
In line with the focus on multinationals and corporate's avoiding paying their way, a change to the scope of GST has been introduced which is designed at levelling the playing field between domestic and international digital media companies.
The change in law is proposed to apply from 1 July 2017 which GST being applied to digital products and services provided to Australian consumers. This is regardless of where the supplier is located.
The practical collection of the GST is also being considered with operators of an ‘electronic distribution service’ liable for the GST on an ‘inbound intangible consumer supply’. This is seeking to avoid the need for the ATO to pursue foreign companies.
As previously foreshadowed the start date of the proposed regime for MITs has been deferred to 1 July 2016. This is a further deferral of the regime which was initially flagged to commence from 1 July 2011, although early adoption is still possible.