Taxation, national interest and foreign investment: new Australian guidelines
On 22 February 2016, the Treasurer announced that the Australian Government will apply new requirements to multinational entities investing in Australia to ensure “companies operating in Australia pay tax on their Australian earnings”.
According to the Treasurer, “the Australian Government expects foreign enterprises operating in Australia to meet all obligations imposed under tax laws and to cooperate with the Australian Taxation Office (ATO) in a timely and complete manner.”
The announcement should be seen in the context of an unprecedented focus on multinational tax – which is manifested in policy, political rhetoric, media coverage and public statements from the ATO. At the same time, the ATO has moved on a number of fronts to proactively seek upfront engagement with taxpayers at the early stage of the investment cycle.