Treasurer Joe Hockey has unveiled new measures to crack down on tax avoidance by multinational companies and extend the GST to digital downloads, the so-called "Netflix tax".
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Mr Hockey said the tightening of provisions in part 4A of the Tax Act would deal with the tax avoidance of 30 identified multinational companies - which some in government have taken to calling the "dirty 30" - and would look to start from January 1 next year.
Big technology companies including Google, Microsoft and Apple are expected to be targeted by the measures, while the tax affairs of News Corp, already subject to considerable scrutiny by the Australian Taxation Office, could also be covered by the new provisions.
The second measure, Mr Hockey said, was designed to level the playing field on the GST by extending the consumption tax to digital products and would deliver an anticipated $350 million in additional revenue, which will flow through to the states.
Some of the digital purchases that could be affected by the changes include room rental service Airbnb, car-sharing service Uber, movie download service Netflix, and some Google products. Some digital download services available in Australia, such as Apple's iTunes and Google's Play store, already pay GST.
The announcement came as the Treasurer brushed aside suggestions he had been sidelined during the budget process.
Social Services Minister Scott Morrison has been ubiquitous in the lead up to the budget, selling the government's new childcare package and explaining proposed changes to the pension, prompting questions about the Treasurer's future in the job.
Mr Hockey would not say how much the strengthened anti-avoidance measures - which are not the same as a previously flagged diverted profit, or "Google tax" - would raise from the 30 companies in question but said that it would target the "billions" of profits being shifted offshore.
"Obviously they have not been paying their fair share of tax in Australia, in fact they have been paying no tax in Australia. Only by being embedded in their businesses have we been able to work out their business model," he said.
"I am not going to make the same mistake that Labor made and bank money that is not identifiable," he said in reference to the former Labor government's mining tax.
After consultation with the states and territories on the changes to the GST, Mr Hockey said the second integrity measure would "ensure that the suppliers of digital products and services into Australia charge the GST on those products".
"It is plainly unfair that a supplier of digital products into Australia is not charging the GST whilst someone locally has to charge the GST," he said.
"When the GST legislation was originally drafted, it did not anticipate the massive growth in the supply of digital goods like movie downloads, games and eBooks from overseas."
Mr Hockey was quick to add that the tax integrity measure was not a new tax and that "we don't need to have a new tax in Australia".
"We need to strengthen our anti-avoidance measures. If we do strengthen our own anti-avoidance measures … we will be able to recover the tax that should be paid in Australia on the profits that are made in Australia."
The Treasurer said the Tax Commissioner would have the power to recover unpaid taxes and slap fines of up to an additional 100 per cent for unpaid taxes, plus interest.
Mr Hockey would not name the 30 companies involved but said it was "pretty evident which companies are involved".
Labor assistant treasury spokesman Andrew Leigh said the opposition was happy to look at the details of the so-called "Netflix tax".
But he criticised Mr Hockey on the tax avoidance measures, pointing out "we had Joe Hockey first saying he was going to legislate a 'Google tax', then was going to inquire into a 'Google tax', and then wasn't going to legislate a 'Google tax' after all".
"It's hard to know how seriously Australians should take this latest uncosted thought-bubble."
