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Labor's plan to ensure multinationals pay their fairer share of tax



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JIM CHALMERS MP

SHADOW TREASURER

MEMBER FOR RANKIN

STEPHEN JONES MP

SHADOW ASSISTANT TREASURER

SHADOW MINISTER FOR FINANCIAL SERVICES AND SUPERANNUATION

MEMBER FOR WHITLAM

ANDREW LEIGH MP

SHADOW ASSISTANT MINISTER FOR TREASURY

SHADOW ASSISTANT MINISTER FOR CHARITIES

MEMBER FOR FENNER

LABOR’S PLAN TO ENSURE MULTINATIONALS PAY THEIR FAIR SHARE OF

TAX

An Albanese Labor Government will join the growing global efforts of more than 130 countries

with responsible measures to ensure multinational companies pay a fairer share of tax.

Australians are paying much more tax now under this Liberal Government than the last Labor

Government, while at the same time too many multinationals are avoiding their tax obligations.

Labor’s plan will:

• Level the playing field for Australian businesses.

• Ensure that Australians are not losing out on funds that should be available for vital

services like Medicare, aged care and child care.

• Help repair the Budget.

Australians shouldering $1 trillion in public debt racked up by the Morrison Government have

been losing out on funds that should be available for vital services like Medicare, aged care

and child care because multinational companies have been using tax havens and tax

avoidance schemes to avoid paying tax in Australia.

That’s why Labor will mirror global developments on multinational tax through a responsible

and measured multinational tax integrity package that will close tax loopholes exploited by

multinational companies and improve transparency.

Labor understands that businesses of all sizes make important contributions to the economy

and we want to see that continue.

These responsible reforms will even the playing field for Australian businesses, including small

businesses, and help fund essential services Australian taxpayers rely on.

Multinational companies operating across borders are too often able to shift profits to low or no

tax jurisdictions to avoid paying tax in countries like Australia.

These practices have become more sophisticated as companies use intangible assets such as

intellectual property that they hold in low tax jurisdictions.

The rapid growth of the digital economy has exacerbated this issue.

Labor will tackle multinational tax avoidance in four ways.

1. Supporting the OECD’s Two-Pillar Solution for a global 15 per cent minimum tax, and ensuring some of the profits of the largest multinationals - particularly digital firms - are

taxed where the products or services are sold.

2. Limiting debt-related deductions by multinationals at 30 per cent of profits, consistent with the OECD’s recommended approach, while maintaining the arm’s length test and

the worldwide gearing ratio.

3. Limiting the ability for multinationals to abuse Australia’s tax treaties when holding intellectual property in tax havens.

4. Introducing transparency measures including reporting requirements on tax

information, beneficial ownership, tax haven exposure and in relation to government

tenders.

These modest and responsible measures are expected to raise $1.89 billion over the forward

estimates, which will help fund essential services and support a budget that has been

weakened by a decade of Liberal rorts and wasteful spending.

The Treasurer was happy to praise these global developments made by the OECD and others

in multiple press releases but he has taken no meaningful steps to make sure multinationals

pay their fair share of tax in the countries where they make their profits.

Scott Morrison and Josh Frydenberg cannot simultaneously mount a scare campaign on these

tax proposals while they pretend to support global efforts on multinational tax avoidance. They

can’t have it both ways.

These measures will not start before 2023, ensuring there is the right amount of time to consult

with industry on the implementation of these rules, which carefully target activities deliberately

designed to minimise tax - without creating an extra burden on legitimate business activity.

Labor’s plan to tackle multinational tax avoidance complements our economic strategy to ease

the costs of living, strengthen Medicare, deliver cleaner and cheaper energy, a better NBN,

cheaper access to child care, fee-free TAFE to tackle the skills crisis, and a Future Made in

Australia.

Australians cannot afford another wasted decade of missed opportunities, or risk another three

years of mismanagement and attacks on wages, job security, superannuation and Medicare.

A better future means a better budget, a better economy, and a better government that is

willing to take the necessary steps to ensure multinationals pay a fairer share of tax in

Australia.

WEDNESDAY, 27 APRIL 2022

MEDIA CONTACT: BRETT MASON (CHALMERS) 0419 239 811