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Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) Bill 2019 – Second Reading
Mr SUKKAR(Deakin—Assistant Treasurer and Minister for Housing) (19:01): I firstly thank all the members who’ve contributed to the debate this evening. As we’ve outlined, the government’s committed to strengthening the integrity of our tax system, closing loopholes and ensuring taxpayers’ dollars are spent prudently. The measures in the Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) Bill 2019 build on this commitment.
As has been outlined, schedule 1 to the bill improves the integrity of Australia’s thin cap rules. Australia’s thin cap rules prevent multinationals from having unrealistically high levels of debt in Australia in order to claim excessive interest deductions. The bill strengthens the integrity of the thin cap rules by improving the reliability of asset valuations used to support debt deductions. Multinationals, in essence, will need to align the value of their assets for thin cap purposes with the value included in their financial statements. The bill will also ensure that all foreign-controlled consolidated groups are recognised as inward-investing entities. This will confirm that these entities are not able to use thin cap tests that are only appropriate for outbound investors. The changes in schedule 1 to the bill build on the strong actions the government has already taken over a period of time to combat multinational tax avoidance.
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, effective 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.
Finally, schedule 3 to the bill removes liability for luxury car tax from cars that are reimported following service, repair or refurbishment overseas. It ensures there will be equal tax treatment of car refurbishments regardless of where the refurbishment is performed.
I therefore commend this bill to the House.
Question agreed to.
Bill read a second time.
Click here to access a PDF transcript of the Hansard extract of this speech.