Home > Industry > Concerns Grow Around Incoming “Google Tax”

Concerns Grow Around Incoming “Google Tax”

The Turnbull government’s efforts to introduce a “diverted profits tax” or “Google tax” could have major implications for Australian businesses looking to expand internationally.

The second tax of its kind, it’s scheduled to come into effect on July 1st. Designed to target entities with annual global income of $1bn or more, the Google tax will impose a 40% penalty rate on those caught undercutting Australia’s tax rate of 30% by transferring it to countries with a lower tax rate for reasons of “insufficient economic substance”.

If it passes through parliament, it’s expected to affect more than $200 billion of financial transactions and raise $200 million over four years.

Those caught out will have 21 days to pay and can only appeal the ruling 12 months later.

It’s this pay-first-ask-questions-later approach that has Australia’s Corporate Tax Association riled.

The CTA have blasted the tax’s broadness saying it will have “unpredictable outcomes” and prove “detrimental to all companies operating in Australia”.

They say “it changes the onus of proof by requiring payment up front and significantly limits taxpayers’ appeal rights” and warns that “leading non-US companies may be enticed to re-domicile” as a result of global trends that will see countries like the US and UK lower their tax rates.

Likewise, Chartered Accountants Australia and New Zealand told the AFR that “greater guidance is needed in the bill on the DPT’s scope, purpose and offensive transactions”.

Other groups, like the Tax Justice Network, have expressed concerns that the tax doesn’t go far enough.

They say the annual income threshold should be lowered to $200 million and the proposed tax reduction threshold dropped to 10%.

The Google tax is expected to come into effect from July 1 this year.



You may also like
Largest Aussie Chipmaker Gets $100M Funding From Japanese Giant
Turnbull Takes On Trolls
World Leaders Cool To Turnbull Plea On Data Decryption
Shed The Apple Watch, PM Told, Ahead Of Cabinet Meetings
COMMENT: Why NBN Boss is Right & Hysterical Socialist Journalists Are Wrong

Popular Posts

Amazon Releases Three New AI-Enabled Fire HD 8 Tablets
Latest News
/
/
Apple Watch Series 10
Apple Pulls Buggy WatchOS 11.1 Beta 3 Update
Latest News
/
/
New Moto Buds Launched In Australia
Latest News
/
/
SmartThings Feature Unveiled At Samsung Dev Conference
Latest News
/
/
Just An ‘Accounting Issue’ Claims Harry” Chatlani After Being Sued By Kogan
Latest News
/
/

Digital Magazines

Recent Post

Amazon Releases Three New AI-Enabled Fire HD 8 Tablets
Latest News
/
//
Comments are Off
Amazon has unveiled three new Fire HD 8 tablets: the Fire HD 8 (2024), Fire HD 8 Kids, and Fire...
Read More