As part of the multinationals and tax transparency measures of the 2022–2023 Federal Budget, there will be a new anti-avoidance rule to prevent significant global entities (SGEs) from claiming tax deductions for payments made directly or indirectly to related parties in relation to intangibles held in low-or no-tax jurisdictions. The measure will apply to payments made on or after 1 July 2023 and for the purposes of this measure, a low or no tax jurisdiction is a jurisdiction with a tax rate of less than 15% or with a preferential patent box regime without sufficient economic substance.
This presentation covers how broad this new anti-avoidance rule may apply and how it practically applies to SGEs. Given the ambit of the proposed measures and a start date for payments made on or after 1 July 2023, how do SGEs navigate through this new measure, understand some of its challenges and get prepared.