Setting out measures to tighten tax legislation today on the eve of the 2015/16 budget, Hockey said corporations were ‘diverting profits earned in Australia away from Australia to no-tax or low-tax jurisdictions’.

Although he did not name the firms, Hockey said action would be taken to tackle examples of avoidance observed from as many as 30 multinational corporations from next January.

He said it was ‘pretty evident which companies’ would be target and it shouldn’t be ‘assumed that any of them are Australian’.

Big companies like Google, Microsoft and Apple were among those expected to be targeted.

Billions of dollars of profits were being shifted offshore he said, although establishing the actual amount that would need to be remitted in tax was more difficult.

‘Tomorrow night I will be releasing legislation that strengthens our anti-avoidance regime,’ he said.

‘If we strengthen our own anti-avoidance laws to ensure the Tax Office has the powers to see through these contrived arrangements, then we will be able to recover the tax that should be paid in Australia.

‘Our penalties for diverted profits will go further than the United Kingdom. The Tax Commissioner will have the power to recover unpaid taxes and issue a fine of an additional 100% of unpaid taxes plus interest.’

Setting out a series of tax reforms, Hockey also announced an extension of the country’s the Goods and Service Tax to digital downloads.

This would ensure that suppliers of digital products and services into Australia are charged at the same rate as firms in the country, ensuring a level playing field, he said.

‘It is plainly unfair that a supplier of digital products into Australia is not charging the GST whilst someone locally has to charge the GST.

‘When the GST legislation was originally drafted, it did not anticipate the massive growth in the supply of digital goods like movie downloads, games and eBooks from overseas. I have consulted with the States and Territories and following further discussions at an officials level we are releasing the draft legislation for review.’

This extension is expected to raise $350m over the next four years.