The Treasurer and the UK Chancellor of the Exchequer have announced the urgent establishment of a joint working group between Australia and the UK to further consider and develop initiatives in relation to diverted profits by multinational enterprises.
The ministers said that the recent G20 meeting in Washington DC (16–17 April 2015) highlighted the issue that, through contrived arrangements, some multinationals are diverting profits to avoid tax in their relevant jurisdictions. The ministers have resolved, subject to the completion of the UK general election on 7 May 2015, to establish a senior officials working group that will develop measures to address the diversion of profits by multinational enterprises away from their host countries.
The working group will build on the UK’s experience of introducing a diverted profits tax, which came into effect at the beginning of April 2015.
The ministers also said that any working group initiatives will be consistent with the work of the OECD on Base Erosion and Profit Shifting, and other international initiatives such as the automatic exchange of information and tax inspectors without borders.
Source: Treasurer’s media release, 19 April 2015.
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