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Thursday, 9 February 2017
Page: 466

Mr MORRISON (CookTreasurer) (10:02): I move:

That this bill be now read a second time.

The Diverted Profits Tax Bill 2017 forms part of a package of bills to combat multinational tax avoidance.

The bill imposes a new diverted profits tax that is targeted at multinationals who enter into arrangements with offshore related parties that lack economic substance so as to divert their Australian profits to related parties in lower tax countries, in order to avoid paying Australian tax.

The bill imposes an up-front diverted profits tax liability payable on the amount of the diverted profits at a penalty rate of 40 per cent.

This has the effect of encouraging greater cooperation between uncooperative multinationals and the ATO. As a result this will greatly reduce the length of disputes between the ATO and multinationals, and lead to timelier dispute resolution.

Further details of the bill and the new diverted profits tax are set out in the explanatory memorandum for the Combating Multinational Tax Avoidance Bill 2017.

Debate adjourned.