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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. |
Companies caught shifting profits will be taxed at a penalty rate of 40%, rather than the usual 30% rate . | |
Treasurer Scott Morrison's first budget doubles as the government's pitch to voters at an early election slated for 2 July. | |
The government is seeking to raise additional revenue to pay for tax cuts. | |
"Everyone has to pay their fair share of tax, especially large corporates and multinationals," Mr Morrison said during his address to parliament. | |
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. |