Hockey puts multinationals on notice

Treasurer Joe Hockey has introduced new laws to tackle tax avoidance by large international companies.

Treasurer Joe Hockey has introduced legislation that aims to tackle multinational tax avoidance. (AAP)

Joe Hockey has put multinationals trying to avoid their fair share of tax in Australia on notice.

In what could prove to be one of his last acts as treasurer, Mr Hockey introduced to parliament a package of draft laws that target tax avoidance by big international companies.

Tax commissioner Chris Jordan hopes to claw in "hundreds of millions of dollars at least" under the new rules that strengthen his enforcement powers and impose stronger penalties for those who flout the law.

But there is no specific revenue estimate because while the ATO can gauge the billions of dollars that targeted companies earn in sales in Australia, it does not have much information at this stage on their cost structure and what actual profit they make.

Shadow assistant treasurer Andrew Leigh criticised what he called an "empty tax plan".

"Joe Hockey's handling of multinational tax shows exactly why he's likely to be dumped as treasurer," Dr Leigh told reporters in Canberra on Wednesday.

"After over two years of bluster, Mr Hockey's best effort is a policy so vague that the Treasury couldn't even cost it."

But Mr Hockey said he was not prepared to make the same mistake as former Labor treasurer Wayne Swan, who put a number on his mining tax, spent the lot, and then found it raised no revenue.

"I have always been conservative with the numbers," the treasurer told reporters.

Despite Australia having some of the toughest tax laws in the world, some multinationals continued to avoid paying tax on Australian profits, he said.

"This undermines the public faith in the tax system that leaves families and small businesses to unfairly carry the taxation burden," Mr Hockey earlier told parliament.

Mr Hockey said he had been working with the UK government and the OECD to bring in the new laws from January 1, 2016, that include country-by-country reporting to give authorities a greater visibility into international structures.

The measures will apply to more than 1000 large multinationals operating in Australia with annual global revenue of $1 billion or more.

"These companies represent the highest risk to Australia's tax base," Mr Hockey said.

Aware of the crackdown, a number of multinationals already had come forward to identify profits previously unseen by the ATO.

They were prepared to restructure their business to pay a fair share of taxes, Mr Hockey said.