Sheep, kangaroos, bunnies and hypocrisy: Australian international tax policy after the OECD's BEPS project

Image sourced from Flickr by Dean Wiles

Sheep, Kangaroos bunnies and hypocrisy: Australian international tax policy after the OECD’s BEPS project
Thursday 20 July 2017, 12.15-1.30pm
C. John Taylor, UNSW

Successive Australian governments have claimed that Australia has been and will be in the forefront of countries that respond positively to the recommendations of the OECD’s Base Erosion and Profit Shifting (BEPS) project by taking action against international tax planning by multinational enterprises. This presentation discusses Australia’s recently enacted Diverted Profits Tax, the 2015 Multinational Anti Avoidance Law, Australia’s proposed adoption of the OECD’s hybrid mismatch recommendations, and its proposed adoption of the OECD’s Multilateral Instrument for modifying Tax Treaties. The presentation argues that these actions will produce a complex and conceptually incoherent Australian international tax regime. The regime will still discriminate against foreign investors into Australia and while providing an incentive for Australian businesses to minimise their foreign tax will now threaten them with a targeted general anti avoidance provision looming over them when they do so. The presentation highlights the dangers of: (a) copying provisions from other jurisdictions without properly considering their interaction with foreign law and existing domestic law; (b) the adoption of recommendations which make domestic law treatment of transactions depend on their treatment in another jurisdiction; and (c) the adoption of a multilateral instrument which, due to the amount of alternative options available, will affect existing bi-lateral tax treaties in diverse, and possibly unpredictable, ways. The presentation will argue that the problem of BEPS is better addressed by readjustments of domestic tax rules to produce more neutral and less discriminatory cross border investment environments.

C. John Taylor is a Professor in the School of Taxation and Business Law in the Business School at UNSW, Sydney, Australia. Professor Taylor’s main areas of research have been: capital gains tax; corporate – shareholder taxation; international tax; taxation treaties; and tax simplification.

More details and registration to the event is available here.

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