The Australian government has released legislation to tighten rules governing corporate taxation such as the use of offshore tax havens. The bill is not aimed at any particular sector of the economy, but several resource and commodity companies have come under scrutiny following a Senate inquiry on the issue.
The bill seeks to target companies that carry out business activity in Australia but book the revenue generated from that activity in an offshore low tax or no tax jurisdiction. Treasurer Joe Hockey did not specify industries or companies the proposed law will target. A Senate inquiry into corporate tax avoidance revealed that UK-Australian resources firm BHP Billiton was in dispute with the Australian Tax Office over a A$522mn ($401mn) tax bill for booking mining profits through its Singapore marketing office.
The first measure of the law deals with the activities of 30 identified multinational companies, Hockey said. BHP Billiton is Australia’s largest corporate taxpayer.
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