Australian International Income Taxation: Policy, Principles and Practice

The Global Financial Crisis of 2008 left many economies with significant budgetary problems. In the search for revenue, the Organisation for Economic Cooperation and Development (OECD) and the Group of 20 Nations (G20) in 2012 charged the OECD with the ‘Base Erosion and Profit Shifting’ (BEPS) project, examining international tax planning by multinational groups. BEPS has been a major theme in international tax discussion since with the project being opened to non-OECD countries through its ‘inclusive framework’. Progress was rapid with the OECD producing an initial report and an Action Plan in 2013. Subsequently, several reports in OECD countries and in the European Union dealt with issues related to BEPS culminating in the publication of the Final BEPS Reports, the Multilateral Instrument and the 2017 update to the OECD Model Tax Convention.

The BEPS project, however, did not end there and remains a work in progress. The focus is now on what has become known as Pillar I and Pillar II which are concerned with tax issues arising from the digitisation of the economy and raise fundamental jurisdictional questions about the relative taxing rights of residence and source countries.

Although one of the insights of the BEPS project has been recognition of the need for co-ordinated responses by countries to cross-border tax planning strategies many of the recommendations in the BEPS Final Reports can only be implemented by national legislation. Hence, the need for this publication on Australian international income tax law that analyses the current domestic law and tax treaty provisions and takes into account the recommendations in the BEPS Final Reports.

After discussing international tax policy considerations and the historical development of current Australian rules in the introduction, three chapters examine Australian domestic law rules that apply in the absence of a double tax treaty. Australian double tax treaties and their effect on domestic law are then analysed in Chapter 5. The final two chapters discuss Australian international anti-avoidance provisions and administrative aspects of Australian international taxation. This book provides a thorough discussion of current Australian international tax rules and their implications for taxpayers.