Treasurer: Strengthening our taxation system

The Treasurer, Joe HockeyThe Hon. Joe Hockey, Federal Member for North Sydney Treasurer from 18.9.13 to 21.9.15 has issued the following media release:

Today I am announcing that the Government will be proceeding with two new major tax integrity measures in the Budget tomorrow night.

Multinational Anti-Avoidance Law

The first measure deals with the activities of 30 identified multinational companies. These companies are diverting profits earned in Australia away from Australia to no or low tax jurisdictions.

Tomorrow night I will be releasing legislation that strengthens our anti-avoidance regime.

Levelling the playing field for GST

The second tax integrity measure will ensure that there is a level playing field for the suppliers of digital products and services in Australia in relation to the GST.

When the GST legislation was drafted it did not anticipate the massive growth in the supply of digital goods like movie downloads, games and e-books from overseas.

I have consulted with the States and Territories and following further discussions at an officials level we are releasing the draft legislation for review.

Attachments

Application of the Multinational Anti-Avoidance Law

 

Multinational tax avoidance action plan

Read more…

Commentary from others:

Joe HockeyThe Hon. Joe Hockey, Federal Member for North Sydney Treasurer from 18.9.13 to 21.9.15 unveils GST on digital downloads and crackdown on big companies avoiding tax

Treasurer Joe HockeyThe Hon. Joe Hockey, Federal Member for North Sydney Treasurer from 18.9.13 to 21.9.15 has unveiled two new measures to crack down on tax avoidance by multinational companies and extend the GST to digital downloads.
The second measure, Mr Hockey said, was designed to level the playing field on the GST by extending the consumption tax to digital products and woulddeliver an anticipated $350 million in additional revenue, which will flow through to the states. Some of the digital purchases that could be affected by the changes include room rental service Airbnb, car-sharing service Uber, movie download service Netflix, and some Google products. Disclaimer: These polls are not scientific and reflect the opinion only of visitors who have chosen to participate.
Via smh.com.au

Australians Will Have To Pay A ‘Netflix Tax To Stream Online Content

Currently, Australians do not pay goods and services taxes (GST) for online purchases that are under $1000 AU. Netflix stated that it will add the GST when the government passes it, which will increase the cost of the popular streaming service to about the same amount as other streaming services like Presto and Stan. These locally-owned streaming services already charge a tax.

Australians will have to pay taxes on digital products such as movies, music, books and software as part as a new legislation dubbed the ‘Netflix tax.’

Australian treasurer Joe HockeyThe Hon. Joe Hockey, Federal Member for North Sydney Treasurer from 18.9.13 to 21.9.15 announced on Tuesday that the tax on Netflix and other digital services will be introduced into the 2015 federal budget.

The “Netflix tax” is expected to raise $350 million over four years, with the revenue going to the states and territories, rather than the federal government. The legislation will go into effect January 1. Via techtimes.com

An analogue budget meets the digital world

Funny how measures to strengthen the integrity of a tax system always seem to deliver more tax to the government. First, the Government plans to adjust anti-avoidance laws to crack down on multinationals shifting their profits to lower taxing jurisdictions. Second, the Government is going to introduce a Netflix tax – that is, try to impose the GST on digital downloads like books, music, videos and so on.

With it’s crackdown on multinationals, and the plan for a “Netflix tax”, the Government is trying to shoehorn national taxes better suited for an analogue era into the age of digital globalisation, writes Chris Berg.

First, the Government plans to adjust anti-avoidance laws to crack down on multinationals shifting their profits to lower taxing jurisdictions. Second, the Government is going to introduce a Netflix tax – that is, try to impose the GST on digital downloads like books, music, videos and so on.

Let’s start with profit shifting. I’ve tackled the claims that multinationals are evading taxation by shifting their profits across borders on The Drum before. Long story short: it’s a beat up. But the Government wants a budget that sounds fair and nothing sounds fairer than beating up on big companies. The corporate tax is a diffuse and confusing tax. It’s designed that way.

We are told Australian Taxation Officers have been “embedded” in 30 different multinational companies. We’re not told which companies. And at the press conference yesterday the treasurer didn’t want to tell us how much revenue the new anti-avoidance measures might raise. “It’s billions of dollars, obviously.”

And – as with the profit shifting debate – the Government’s rhetoric is running far ahead of its capabilities. It is absolute fantasy that Hockey and the Australian Treasury will be able to impose our taxes on international digital goods providers in any meaningful way. Via abc.net.au

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