Multinationals hit with 'Google tax' in Australia

Treasurer Scott Morrison (Getty)
Treasurer Scott Morrison (Getty)

The Australian government says it will crack down on multinational corporations that try to shift their profits offshore to avoid tax.

It is being dubbed the 'Google tax', and is a key measure unveiled in last night's Australian budget.

Treasurer Scott Morrison says companies caught shifting profits offshore will be taxed at a rate of 40 percent. That is higher than the standard rate of 30 percent.

The proposed Diverted Profits Tax (DPT) will apply to companies with global revenue of more than AU$1 billion and Australian revenue of more than AU$25 million.

The Australian Tax Office will get an extra 1,000 staff to target large companies and wealthy individuals who are trying to avoid tax.

It is hoped these measures will raise AU$3.9 billion in revenue over four years.

The Treasurer said in a statement those "seeking to do the wrong thing will be left with no doubt that deliberate tax avoidance and evasion will not be tolerated. Tax cheats will be tracked down and will face the full force of the law."

It follows a similar move in the UK.

This was the first Budget for Treasurer Scott Morrison and Prime Minister Malcolm Turnbull. It could be their last Budget too, with Australians due to go to the polls on July 2.

Like all Budgets there are winners and losers.

The tax rate for small companies will fall to 27.5 percent on July 1.

The Treasurer says the top tier of the middle-income tax bracket will be lifted to US$87,000, from AU$80,000. Scott Morrison says that will prevent half-a-million people from finding themselves moving from a tax rate of 32 percent to 37 percent.

But four hikes are planned for the excise tax on cigarette.

Tax concessions are being ended for Australians, with superannuation savings of more than $1.6 million.

Newshub.

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