Multinational Anti-Avoidance Law (MAAL) and Pt IVA — a critical analysis of the Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015 (Cth) and Treasury Laws Amendment (Combating Multinational Tax Avoidance) Bill 2017 (Cth) and comparison with general anti-avoidance provisions

Abstract

The government recently introduced the Multina- tional Anti-Avoidance Law (MAAL) as part of the Tax Laws Amendment (Combating Multinational Tax Avoid- ance) Act 2015 (Cth), the legislation having taken effect as of 11 December 2015. The intention of this legislation is to moderate the erosion of the Australian tax base by preventing multinationals from utilising artificial or contrived arrangements to avoid the attribution of busi- ness profits to Australian subsidiaries.

This paper was originally published as a conference paper earlier this year. Since publication, the govern- ment has further introduced a diverted profits tax (DPT) as part of the Treasury Laws Amendment (Combating Multinational Tax Avoidance) Act 2017 (Cth), its pro- visions taking effect progressively as of 1 July 2017.

At the time of writing there is currently no case law regarding the new legislation; and what impact the new legislation has on strengthening the tax base remains to be seen. This paper will expand on the conference paper; including a critical analysis of the Diverted Profits Tax Act 2017 (Cth) (DPT Act) in comparison with the MAAL and general anti-avoidance provisions. This paper will compare the substance of the MAAL and DPT Act to consider if they operate effectively together and as standalone provisions or cumulatively and in conjunction with the general anti-avoidance provisions.