Component 1: Supporting a global 15% minimum tax
Implement the OECD’s Global Two Pillar plan for a global 15% minimum effective tax rate on multinationals and for the taxes on multinational profits to better reflect where products and services are sold.
Component 2: Limiting debt related deductions by multinationals
Limit the deductions multinational firms can claim for net interest expenses to 30% of profits (EBITDA – earnings before interest, taxes, depreciation and amortisation) from 1 July 2023, consistent with OECD recommendations.
Component 3: Tax havens integrity
Deny tax deductions for the use of intellectual property when payments are made to a jurisdiction subject to the ‘sufficient foreign tax test’, as outlined in Section 177L of the Income Tax Assessment Act 1936, or where the jurisdiction houses intellectual property in a tax preferential patent box regime. This would apply from 1 July 2023.
Component 4: Public reporting of tax information on a country-by-country basis
Require the public release of high-level data on how much tax large multinational firms pay in the jurisdictions they operate in, alongside the number of employees working there.
Component 5: Public registry of ultimate beneficial ownership
Implement a public registry of beneficial ownership to ensure transparency over who actually owns a company, reducing our vulnerability to money laundering and tax evasion. The registry would show who ultimately owns, controls or receives profits from a company or legal vehicle, even when the company is registered as legally belonging to another person, such as an accountant or a shell company.
Component 6: Mandatory reporting of tax haven exposure to shareholders
Require companies to disclose to shareholders if they are doing business in a jurisdiction with a tax rate below the global minimum (15%) as a ‘material tax risk’.
Component 7: Requiring government tenderers to disclose their country of tax domicile
Require all firms tendering for Australian Government contracts worth more than $200,000 to state their country of domicile for tax purposes.