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Monday, 25 June 2018
Page: 6136

Mr SUKKAR (DeakinAssistant Minister to the Treasurer) (12:43): Firstly, I thank all those members who have contributed to the debate. The Treasury Laws Amendment (Tax Integrity and Other Measures No. 2) Bill 2018 incorporates several measures which are designed to improve the sustainability and integrity of both the Australian and international tax systems and to support local initiatives.

Schedules 1 and 2 to the bill implement the OECD hybrid mismatch rules. These rules will prevent multinational companies from gaining an unfair tax advantage due to differences in the tax treatment of a particular instrument or entity between jurisdictions. The rules also include an integrity rule which will apply where a taxpayer attempts to circumvent the hybrid mismatch rules by routing funds through foreign interposed entities with the aim of gaining an Australian income tax deduction and deliberately avoiding those hybrid mismatch rules. The hybrid mismatch rules build upon previous government actions on tax avoidance, including the introduction of stronger transfer pricing rules, the Multinational Anti-Avoidance Law and the diverted profits tax. The government has also increased penalties for companies that fail to take reasonable care when making statements to the ATO and has expanded the ATO's capacity, through the tax avoidance task force.

Schedule 3 to this bill clarifies the expenditure that can be claimed under the producer offset for films undertaking principal photography overseas. The government is a proud supporter of the Australian screen industry and the producer offset allows production companies to claim a tax rebate, on qualifying Australian production expenditure, for films with significant Australian content. In situations where the subject matter of the Australian film reasonably requires shooting in a foreign location, some overseas expenditure may be claimed. For example, a documentary about Gallipoli would require some filming to take place in Turkey. The amendment ensures that only expenditure relating to services performed by Australian residents, including cast and crew, can be claimed under the so-called 'Gallipoli clause'. The amendment ensures the producer offset continues to serve its policy objective to support the Australian screen industry and strengthens and encourages the employment and use of Australian-resident cast and crew on productions filming overseas.

Schedule 4 to the bill will deliver on the government's 2018-19 budget promise to provide a five-year income tax exemption to a subsidiary of the International Cricket Council. The exemption will assist the International Cricket Council to stage the ICC World Twenty20 in Australia in the year 2020. The bill will provide to the IBC an exemption from withholding tax liability for interest, dividend and royalty payments over that same period.

Schedule 5 to the bill amends the Income Tax Assessment Act 1997 to include the Melbourne Korean War Memorial Committee Inc as a specifically-listed deductible gift recipient, between 1 January 2018 and 31 December 2019. This allows members of the public to receive income tax deductions for donations they make between those dates to the Melbourne Korean War Memorial Committee.

I commend the bill to the House.

Question agreed to.

Bill read a second time.