Division
David Bradbury Firstly, I would like to take the opportunity to thank all of those members who have contributed to this debate. The Tax Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Bill 2013 amends the income tax law to protect the integrity of Australia's income tax system and to secure a fair, competitive and sustainable tax base for the future of the nation. These reforms come forward at a time of unprecedented global recognition that base erosion and profit shifting must be addressed. The G20 finance ministers and central bank governors have acknowledged the importance of addressing base erosion and are working on a comprehensive plan to address base erosion and profit shifting. Similarly, this government is committed to taking steps where necessary to ensure the integrity and the sustainability of the tax system. These amendments demonstrate that commitment. Schedule 1 amends part IVA of the Income Tax Assessment Act 1936. Part IVA is the income tax law's general anti-avoidance rule. Its proper operation is vital to protect the integrity of the income tax law, which is still overwhelmingly the single largest source of Commonwealth revenue. The principal role of part IVA is to counter arrangements that, when objectively viewed, are carried out with the sole or dominant purpose of securing a tax advantage. Broadly speaking, part IVA does this by exposing the substance or reality of the arrangements to the ordinary operation of the tax law. The proper role for the tax benefit test is to compare the tax consequences of what the taxpayer actually did with the tax consequences of a reasonable alternative that achieves substantively the same thing. It makes little sense in an anti-avoidance provision to allow the tax consequences of what the taxpayer has achieved to act as a shield against the operation of part IVA. In particular, taxpayers should not be able to avoid the normal tax consequences of what they have actually done by arguing
House of Representatives, 2013-05-16. affirmative: ayes 73, noes 70.
Question
David Bradbury Firstly, I would like to take the opportunity to thank all of those members who have contributed to this debate. The Tax Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Bill 2013 amends the income tax law to protect the integrity of Australia's income tax system and to secure a fair, competitive and sustainable tax base for the future of the nation. These reforms come forward at a time of unprecedented global recognition that base erosion and profit shifting must be addressed. The G20 finance ministers and central bank governors have acknowledged the importance of addressing base erosion and are working on a comprehensive plan to address base erosion and profit shifting. Similarly, this government is committed to taking steps where necessary to ensure the integrity and the sustainability of the tax system. These amendments demonstrate that commitment. Schedule 1 amends part IVA of the Income Tax Assessment Act 1936. Part IVA is the income tax law's general anti-avoidance rule. Its proper operation is vital to protect the integrity of the income tax law, which is still overwhelmingly the single largest source of Commonwealth revenue. The principal role of part IVA is to counter arrangements that, when objectively viewed, are carried out with the sole or dominant purpose of securing a tax advantage. Broadly speaking, part IVA does this by exposing the substance or reality of the arrangements to the ordinary operation of the tax law. The proper role for the tax benefit test is to compare the tax consequences of what the taxpayer actually did with the tax consequences of a reasonable alternative that achieves substantively the same thing. It makes little sense in an anti-avoidance provision to allow the tax consequences of what the taxpayer has achieved to act as a shield against the operation of part IVA. In particular, taxpayers should not be able to avoid the normal tax consequences of what they have actually done by arguing
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