Published on the 27/01/2015 | Written by Beverley Head
More than 200 multinational companies, including 25 technology enterprises are under close scrutiny from the Australian Taxation Office…
The Australian Taxation Office has scotched suggestions that it is “going soft” on large corporates avoiding their tax obligations.
ATO second commissioner Andrew Mills in an address at Adelaide University last week confirmed that 25 multinational technology companies were currently having their tax affairs scrutinised.
Of the overall programme Mills said; “We have completed approximately 50 percent of the reviews and have commenced 20 audits where we have identified significant concerns. Our risk identification programme is ongoing and we expect to commence further risk reviews and audits in the future.
“By the second half of this year, we are expecting to see some of these cases tested in court. No doubt the world will be watching with interest to see the outcomes.
“We also expect some companies will accept that they need to contribute more tax in Australia without the need for litigation.”
None of the tech companies facing ATO scrutiny has been named. An early settlement would offer the best chance for continued anonymity.
Even without a public name-and-shame the ATO initiative will be welcomed by many local companies which have argued that the tech sector playing field is not level because some multinational companies have used transfer pricing arrangements to shift tax obligations to lower taxing jurisdictions.
In September, Treasurer Joe Hockey said he had instructed the Commissioner of Taxation to “double his efforts” and undertake more audits of multinational companies “considered a risk to Australian tax collections”.
Speaking at a meeting of G20 finance ministers Hockey acknowledged the slew of reports regarding international companies selling high priced goods and services to Australians but themselves paying relatively little tax – Google and Apple having been singled out particularly.
The treasurer warned that the tax commissioner would take a close look at where profits were being made locally by multinationals and shifted overseas, and whether the transfer pricing rules had been properly applied.
Mills said that following meeting of Asia-Pacific tax commissioners held in Sydney late last year there was a further push underway to establish a regional taskforce to share compliance tactics, boost tax transparency and help countries tackle tax-base erosion and profit shifting.
