✦ Plain-English Summary

Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) 2019

What it does

This bill closes loopholes that let large multinational companies reduce their Australian tax bills by loading up on debt. It also updates tax rules for online hotel bookings and imported luxury cars.

Why it matters

Multinationals have used complex financing structures to shift profits overseas and pay less tax in Australia. These changes make it harder for them to do that, potentially bringing in more tax revenue that could fund public services.

Key details

• Thin capitalisation rules tightened: The bill removes exceptions that allowed foreign-owned companies to claim excessive interest deductions on loans from overseas parent companies. This stops a common tax-minimisation strategy.

• Online hotels: Strengthens GST collection on hotel bookings made through online platforms, closing a gap where some bookings weren't properly taxed.

• Luxury car imports: Tightens rules around bringing refurbished luxury cars back into Australia to avoid luxury car tax.

• Commencement: The main changes (Schedules 1–3) kick in on the first of January, April, July or October after the bill receives Royal Assent, giving businesses a transition period.

Official Description

Amends the: Income Tax Assessment Act 1936 and Income Tax Assessment Act 1997 to: require an entity to use the value of the assets, liabilities and equity capital that are used in its financial statements; remove the ability for an entity to revalue its assets specifically for thin capitalisation purposes; and ensure that non-ADI foreign controlled Australian tax consolidated groups and multiple entry consolidated groups that have foreign investments or operations are treated as both outward investing and inward investing entities; A New Tax System (Goods and Services Tax) Act 1999 to require offshore suppliers of rights or options to use commercial accommodation in Australia to include these supplies in working out their GST turnover; and A New Tax System (Luxury Car Tax) Act 1999 to remove liability for luxury car tax from cars that are re-imported following service, repair or refurbishment overseas.

No formal division recorded

This bill passed by voice vote — parliament agreed without calling a formal count. A division is only recorded when a member explicitly requests one.

No votes yet.

No votes were recorded for this bill.