Australia to crack down on alleged tax avoidance by 30 multinationals

Mon May 11, 2015 4:08am EDT
 
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By Jane Wardell

SYDNEY (Reuters) - The Australian government on Monday announced a world-leading crackdown on alleged tax avoidance by 30 multinational companies in a move that could force the likes of Apple Inc and Microsoft Corp to restructure their businesses to escape huge penalties.

"These companies are diverting profits earned in Australia away from Australia to no-tax or low-tax jurisdictions," Treasurer Joe Hockey told reporters in Canberra.

He declined to identify the targets, but said "it's pretty evident which companies are involved". Google Inc, Apple Inc and Microsoft Corp revealed earlier this year they were under review by the Australian Tax Office.

The Australian subsidiaries of these global tech titans have all denied any tax evasion.

Australia and Britain are leading steps by countries to tackle large companies over base erosion and profit shifting methods of avoiding tax ahead of coordinated international efforts by the OECD through the Group of 20 leading economies (G20).

Hockey did not detail the content of the proposed new laws, but said they would not contain a profits diversion tax like the "Google tax" introduced by Britain on April 1.

He also declined to say how much money Australia expected to raise through the new laws, which will come into force on Jan. 1 if they pass parliament. More details will be provided in the federal budget due for release on Tuesday.

Companies could be fined up to 100 percent of the amount of tax deemed to be avoided, he added.   Continued...

 
Australia's Treasurer Joe Hockey holds a news conference after a meeting of G-20 finance ministers and central bank governors during the IMF-World Bank annual meetings in Washington October 10, 2014.  REUTERS/Jonathan Ernst