Australia: Proposal for diverted profits tax | KPMG | GLOBAL

Australia: Proposal for diverted profits tax

Australia: Proposal for diverted profits tax

Australia’s government announced as part of the 2016 federal budget an intention to introduce a diverted profits tax (DPT) with effect for income years beginning from 1 July 2017. No grandfathering of existing arrangements is proposed. The DPT would target multinational entities.


Related content

The DPT is modelled on the “second limb” of the United Kingdom’s DPT. The first limb was introduced as Australia’s multinational anti-avoidance law (MAAL). 

Broadly, the DPT targets arrangements with “insufficient economic substance” between an Australian entity and an overseas related party that is taxed at a rate less than 80% of the applicable Australian tax rate. Due to the “application rules,” the objective of the DPT would be to change the balance of negotiating power between the Australian Taxation Office (ATO) and large business on transfer pricing and structuring issues. Submissions to Treasury on the proposed DTP are due by 17 June 2016.


Read a May 2016 report prepared by the KPMG member firm in Australia: Proposed key features of a diverted profits tax

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Request for proposal