The agreement was made in the lead up to the Glasgow climate summit and was endorsed by the OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS) proposed tax reforms.
On 13 October, the G20 Finance Ministers and Central Bank Governors pledged support for the OECD BEPS proposal and vowed to work together to achieve a possible 2023 start date, consistent with the OECD’s implementation timeline.
Earlier in October, 136 members of the OECD BEPS, representing more than 90 per cent of global GDP, agreed to a new tax system to help ensure that multinationals pay their fair share of tax globally and in Australia.
This will put a floor on the “race to the bottom” on corporate tax rates and will support the domestic and global economy.
Australia’s ongoing engagement in the OECD-led multilateral process complements the action the government has taken to strengthen the integrity of Australia’s corporate tax system and prevent multinational tax avoidance.
The government has implemented more than a dozen measures to address corporate and multinational tax avoidance, including the Multinational Anti-avoidance Law; the Diverted Profits Tax; increased tax penalties for large entities; and establishing a Tax Avoidance Taskforce within the ATO.
Since 1 July 2016, the ATO has raised more than $22.9 billion in tax liabilities against large public groups, multinational corporations and privately-owned and wealthy groups.
The government has also extended the GST to imported digital products and services from 1 July 2017 and to low value imported goods from 1 July 2018, and to offshore sellers of hotel bookings in Australia from 1 July 2019.