The government is cracking down on multinational tax avoiders, following scrutiny on the likes of Apple, Microsoft and Google shifting profits overseas.
The 2016 Budget, announced yesterday, introduces a Diverted Profits Tax, which will impose a 40 percent penalty rate on large multinationals found trying to shift their profits offshore. The government is also creating a taskforce to hunt down multinational tax cheats.
The budget measures follow years of scrutiny on global companies that fail to pay their fair share of tax in Australia. Technology companies have been particular targets, with leaders from Apple, Microsoft and Google forced to front up to a Senate Enquiry in 2015.
Last December, the Australian Taxation Office published tax data on more than 1,500 public and privately held companies, showing hundreds didn't pay tax in in Australia in 2013-14, including Acer, Alcatel-Lucent, Citrix, HP, NEC and Vodafone.
It has just been revealed that Google Australia restructured its business to recognise revenue it earns in Australia, in a move that was effective 1 January this year.
The government will provide the ATO with $679 million over the next four years to fund a new Tax Avoidance Taskforce, which will employ around 1,300 people, including 390 new specialised officers, to crack down on multinationals and high-earning individuals.
The taskforce is expected to raise an extra $3.7 billion over the next four years.
"Tax cheats will be tracked down and will face the full force of the law," according to a media release from treasurer Scott Morrison.
Other changes to tax laws will focus on transfer pricing, as well as better protection for whistle-blowers who expose tax misconduct.
Transfer pricing was under scrutiny during last year's Senate Enquiry into corporate tax avoidance, when Apple was forced to deny "inflating the transfer price" of products in order to reduce taxable income in Australia.
Companies with global incomes of more than $1 billion that fail to lodge their tax returns and other documentation will see a massive 100x increase in fines, from $4,500 to $450,000.