Australia is now about to introduce the global minimum tax at 15%, that will be applicable to large multinational companies. The aim of the tax is to prevent the corporates from avoiding taxes by the practice of shifting profits to countries that host low-tax rates. The new tax will target those companies that have global revenues of A$1.2 billion ($817 million) or more; and it will apply either retroactively from January 1, 2024, for some companies, or from January 1, 2025, for others.
In addition, the new law essentially will make sure that income taxed below 15% overseas will be topped up to reach the minimum rate of 15%. It is predicted that the new tax will be liable for around 5,000 companies, however only about 140 are expected to pay the tax. This is due to the fact that most already meet the minimum threshold. Regarding the income to be generated by the new tax, the Australian government assesses that the revenue will reach at A$370 million ($250 million) between 2025 and 2027. The plan aligns with a global agreement led by the OECD and includes rules to address evolving international tax standards.
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