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The MAAL and the diverted profits tax - A comparative


A diverted profits tax was proposed by the federal government in the 2016-17 Budget. A multinational anti-avoidance law (MAAL) was enacted in late 2015. Both the MAAL and the diverted profits tax focus on multinationals that derive $1b or more in group income. The diverted profits tax is proposed to be applicable for income years following 1 July 2017, but to arrangements whenever they were entered into. This means that the development of the diverted profits tax should be closely monitored and risk mitigation should be considered.

This article compares the MAAL and the diverted profits tax to demonstrate where they intersect and the differences between them, and to highlight how these regimes provide a new framework for multinational taxation in Australia. The article also considers example structures to demonstrate where the MAAL and proposed diverted pr ofits tax pr ovide the ATO with two additional avenues to attack structures which concern it.

Author profile

Joanne Dunne CTA
Photo of author, Joanne DUNNE Joanne is a lawyer from Melbourne. She was formerly a tax partner at law firms in both Australia and New Zealand. She has more than 25 years’ tax experience in general income tax, GST, international tax, and tax controversy. Joanne is a member of a wide range of professional organisations, including The Tax Institute’s Tax Disputes Committee, and until 2020 she represented The Tax Institute on the ATO’s Dispute Resolution Working Group. - Current at 11 November 2021
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