Multinationals dodging tax on earnings in Australia could be forced to sell their assets under a tough new crackdown by the Federal Government.

Key points: Greater compliance powers for the Australian Taxation Office

Greater compliance powers for the Australian Taxation Office Agricultural land foreign ownership register and lower $15 million screening threshold for private foreign purchases of agricultural land

Agricultural land foreign ownership register and lower $15 million screening threshold for private foreign purchases of agricultural land FIRB screening of direct interests in agribusinesses valued at $55 million or more

FIRB screening of direct interests in agribusinesses valued at $55 million or more The appointment of former ASIO director-general David Irvine to the FIRB

The appointment of former ASIO director-general David Irvine to the FIRB Forced divestment of 27 properties, worth more than $76 million, illegally acquired by foreign nationals

Treasurer Scott Morrison said new foreign investment applications would now face requirements to pay tax on what they earned in Australia.

In a move that is likely to unsettle multinationals considering an Australian investment, Mr Morrison now has powers to force a company to sell assets if the appropriate tax is not paid.

"The Government is committed to ensuring companies operating in Australia pay tax on their Australian earnings. Where companies fail to do so I will have powers to take action, including ordering divestment of Australian assets," Mr Morrison said in a statement.

"Foreign investment applications will have to comply with Australian taxation law, Australian Taxation Office (ATO) directions to provide information in relation to the investment and advise the ATO if investors enter into any transactions with non-residents to which transfer pricing or anti-avoidance measures of Australian tax law may potentially apply."

Mr Morrison said any breach of the new conditions imposed by the Foreign Investment Review Board (FIRB) could result in prosecution, fines and, ultimately, the divestment of an asset.

"Australians expect all entities operating in Australia to maintain the highest standards of corporate behaviour, irrespective of whether those entities are Australian or foreign owned," Mr Morrison said.

The requirements come after pressure from the ATO and the former treasurer Joe Hockey to ensure multinationals are not able to shift profits to low-tax havens, such as Singapore, to avoid paying more tax in Australia.

The politically charged issue has also prompted hard questioning of multinational chief executives from companies including Google, Apple, Microsoft and News Corporation, who have been grilled by a Senate inquiry.

The legal loopholes in tax law to allow the use of "profit shifting" have seen hundreds of millions, and possibly billions, of dollars of tax avoided in recent years.

However, Labor's shadow assistant treasurer Andrew Leigh has criticised Mr Morrison's announcement for a lack of detail.

"The Treasurer's announcement that the Foreign Investment Review Board will now consider tax issues as part of its national interest assessment process is another attempt to look tough on multinational tax," he said in a statement.

"But just like his much trumpeted multinational tax bill – which had asterisk where there should have been revenue figures – the Treasurer will not say whether this move will return a single extra dollar to the Australian community."

Mr Leigh said Labor has a $7.2 billion multinational tax plan costed by the Parliamentary Budget Office, with just under $2 billion forecast to be raised in the first four years of the policy and the rest over the next six years.

Government lowers agricultural FIRB thresholds

The Government has also announced the strengthening of the FIRB with the appointment of former ASIO and ASIS director-general David Irvine.

In statement, Mr Morrison said Mr Irvine's appointment would bolster the board's ability to advise on national security issues.

Mr Morrison also announced the establishment of a new agricultural land foreign ownership register and the reduction of the threshold for screening proposed purchases of foreign land to purchases worth $15 million.

In addition, FIRB will now screen all direct foreign interests in agribusiness worth $55 million or more.

At the same time, the Government has announced that foreign nationals have been forced to divest 27 properties worth more than $76 million that were illegally acquired.

Former treasurer Joe Hockey launched a crackdown on foreign investment in residential real estate after a House of Representatives committee found widespread breaches and a lack of enforcement of Australia's restrictions on overseas buyers.

