European tax authorities to see Aussie bank details
The federal government is stepping up efforts to catch global tax dodgers, unveiling a plan to share sensitive financial information with tax authorities in Europe's biggest economies.
The agreement came as G20 finance ministers threw their support behind a plan to help close loopholes that have allowed tax minimisation by multinationals, with the federal Treasury expected to float further policy options later this week.
Treasurer Chris Bowen at the weekend said Australia would join a scheme requiring banks to reveal financial information about their customers so it can be shared with tax authorities in Britain, France, Germany, Italy and Spain.
Under the program, modelled on the United States' Foreign Account Tax Compliance Act, banks must reveal information about clients to tax authorities, which can share the information with overseas counterparts when investigating cross-border tax evasion.
Australia is negotiating with the US over its plan, and the government hopes the deal with European nations will better equip authorities to catch people and companies that are avoiding their obligations.
"This continues Australia's strong commitment and leadership in promoting better exchange of information to help ensure the integrity of the international tax system," Mr Bowen said.
Alongside the push, cash-strapped governments are increasing the pressure on multinational companies over their use of tax havens, unveiling plans to prevent income-shifting to low-tax jurisdictions.
In Moscow at the weekend, finance ministers from G20 economies backed an OECD plan that closes loopholes, especially those used by technology companies that operate across multiple jurisdictions.
The 15-point plan called on governments to investigate how their corporate tax systems were coping with the burgeoning growth in the digital economy, and to make sure rules on transfer pricing and interest deductibility were not being abused.
Australia takes over as chair of the G20 later this year, and Mr Bowen signalled the pressure on multinationals would be maintained, saying combating tax avoidance and evasion would remain top priorities.
The federal government also is expected to float further options for curbing tax evasion by multinationals later this week, when a Treasury reference group on multinational profit shifting publishes a long-awaited scoping paper on the extent of multinational tax minimisation and potential responses.