Strengthening Australia’s corporate tax system in the age of the digital economy

The Coalition Government is continuing to strengthen the integrity of Australia’s corporate tax system as part of our plan for a stronger economy and to deliver the essential services that Australians rely on.

That is why we have taken strong action to strengthen our tax rules and close loopholes, making Australia’s tax integrity laws among the strongest in the world.

Building on the action we have already taken, we are releasing a discussion paper seeking views on options to move us towards a fairer and more sustainable tax system for the digitalised economy, which will ensure all businesses operate on a level playing field.

While digitalisation has delivered significant benefits for Australian consumers and businesses, the Government remains concerned that some very profitable, highly digitalised companies pay very little tax in the countries in which they do business.

Australia is committed to working with other countries, through the G20 and the Organisation for Economic Co-operation and Development (OECD), to develop sustainable, multilateral responses to address the challenges to our tax systems arising from digitalisation.

The Government has also written to the Secretary-General of the OECD offering Australia’s assistance on finding a better way to allocate taxing rights in the increasingly digitalised economy. This offer builds on Australia’s significant contribution to this work to date, including as a vice-chair of the OECD’s Taskforce on the Digital Economy.

Further to this, Australia will host the fifth meeting of the OECD Global Forum on Value Added Taxes in March 2019. This will showcase Australia’s world-leading reforms that are levelling the playing field for Australian businesses competing with foreign businesses by extending the GST to imported digital products and services and to low value imported goods.

Stakeholders are invited to lodge submissions online via the Treasury website. Submissions on the discussion paper are due by 30 November 2018.

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