Diverted Profits Tax Act 2017

The Diverted Profits Tax Act 2017 aims to impose a new tax on companies that divert profits to offshore entities to avoid paying their fair share of tax in Australia. The Act defines "diverted profits" as profits that are shifted from the company's Australian operations to its international operations, and imposes a tax rate of 40% on these diverted profits.

The Act commences on July 1, 2017, with some provisions coming into effect at the same time as other related legislation, such as the Treasury Laws Amendment (Combating Multinational Tax Avoidance) Act 2017. The Act applies to companies that have a presence in Australia and are subject to Australian tax laws.

The primary goal of the Diverted Profits Tax Act is to prevent multinational corporations from using complex financial arrangements to avoid paying their share of taxes in Australia. By imposing a new tax on diverted profits, the Act aims to ensure that Australian companies contribute fairly to the nation's revenue streams.

Overall, the Diverted Profits Tax Act 2017 represents an important step in Australia's efforts to combat multinational tax avoidance and promote fairness in corporate taxation.