Multinational plan lacks detail: Labor
Labor has dismissed the Turnbull government’s latest effort to clamp down on multinational tax avoidance, saying it lacks detail.
Foreign companies that don’t pay their fair share of tax could be forced to sell their Australian assets under the government plan.
Requirements on foreign investment applications will ensure multinational companies investing in Australia pay tax on what they earn here.
“Where companies fail to do so I will have powers to take action, including ordering divestment of Australian assets,” Treasurer Scott Morrison said in a statement on Monday.
But Labor dismissed the measure because there was no indication how many companies it would apply to or how much revenue it would raise.
Opposition Leader Bill Shorten said only Labor had a plan to make sure big companies pay their fair share of tax.
“We … would not be a soft touch for multinationals who are treating our tax system as a doormat upon which they rub their tax boots as they head off to other places to pay tax and minimise the taxation they pay in Australia,” he told reporters in Canberra.
Under the government’s plan, foreign investment applications will have to comply with Australian taxation law and tax office directions to provide information.
Companies will be required to advise the tax office if investors enter into any transactions with non-residents to which transfer pricing or anti-avoidance measures of Australian tax law apply.
Additional conditions may also be applied where there is a significant tax risk.
A breach of conditions could result in prosecution, fines and potentially divestment of the asset, Mr Morrison said.