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Australia budget targets multinationals Australia budget: Multinationals to be hit with 'Google tax'
(35 minutes later)
Multinational companies that move profits offshore to avoid tax will be penalised under new measures in Australia's budget.Multinational companies that move profits offshore to avoid tax will be penalised under new measures in Australia's budget.
Treasurer Scott Morrison's first budget doubles as the government's sales pitch for an early election on 2 July. Companies caught shifting profits will be taxed at a penalty rate of 40%, rather than the usual 30% rate .
It also outlined a series of cuts that will take the company tax rate from 30% to 25% by 2026. Treasurer Scott Morrison's first budget doubles as the government's pitch to voters at an early election slated for 2 July.
The budget also contained a small tax cut for Australians earning more than A$80,000 per year. The government is seeking to raise additional revenue to pay for tax cuts.
"This cannot be just another budget because these are extraordinary times," Mr Morrison said during his address to parliament. "Everyone has to pay their fair share of tax, especially large corporates and multinationals," Mr Morrison said during his address to parliament.
"Australians have clearly said we must have an economic plan to make this period of transition a success."
The budget's measures were relatively modest and most were known in advance of the budget speech.The budget's measures were relatively modest and most were known in advance of the budget speech.
One substantial announcement was a series of cuts that will take the company tax rate from 30% to 25% by 2026.
Mr Morrison also announced a small tax cut for Australians earning more than A$80,000 per year.
"This cannot be just another budget because these are extraordinary times," Mr Morrison said.
"Australians have clearly said we must have an economic plan to make this period of transition a success," he said, referring to the move away from mining as the main driver of the economy.
'Google tax'
Multinational firms that shift profits offshore will be taxed at a penalty rate of 40% under a diverted profits tax, similar to the so-called "Google tax" introduced in the UK last year.
The Australian Tax Office will get a 1000-person strong team of tax avoidance specialists who will target large companies and wealthy individuals avoiding tax.
The government also plans to raise revenue by scrapping some tax benefits on retirement savings for the very wealthy.
With major reforms such as a raise to Goods and Services Tax ruled out for this budget, Mr Morrison needed to find additional revenue streams to pay for tax cuts and rein in Australia's estimated A$37.1bn ($28bn; £19bn) budget deficit.