Australia to expand tax treaty network

The new plan put forth by the Morrison government will allow Australia to enter into 10 new and updated tax treaties by 2023, building on the existing network of 45 bilateral tax treaties.

The move aims to ensure Australia’s tax treaty network covers 80 per cent of foreign investment in Australia and about $6.3 trillion of Australia’s two-way trade and investment.

Negotiations with India, Luxembourg and Iceland are occurring this year as part of the first phase of the program. Negotiations with Greece, Portugal and Slovenia are scheduled to occur next year as part of the second phase.

The 2020-21 and 2021-22 budgets earmarked $11.6 million for the Treasury and the Australian Taxation Office to support efforts to expand Australia’s tax treaty network.

Members of the public are encouraged to voice their views on the new plan and ongoing negotiations, and the government will be holding consultations with interested stakeholders.

Tax treaties improve the integrity of the tax system through the establishment of bilateral frameworks with other nations outlining agreements to co-operate on the prevention of tax evasion, the collection of tax debts and rules to address tax avoidance.

The government notes this helps businesses by providing them with greater tax certainty, which encourages increased economic integration through foreign investment and trade.