Push to 'name and shame' tax haven users
The proposed crackdown, announced on Monday, would also clear the way for the government to publish more detail on how much mining tax the resources firms are paying. Until now, the government has refused to say exactly how much money the minerals resource rent tax has raised, citing the need for confidentiality.
A fundamental principle of taxation law is that the affairs of all taxpayers, from individuals to corporations, are confidential. However, as governments worldwide try to stop the use of tax havens, especially by technology firms, large companies operating here may no longer have the same degree of privacy.
Labor hopes to pass legislation, before the election, requiring large firms to publish more details about how much tax they pay here.
"Large multinational companies that use complex arrangements and contrived corporate structures to avoid paying their fair share of tax should not be able to hide behind a veil of secrecy," the Assistant Treasurer, David Bradbury, said.
Although some information can be gleaned from accounts lodged with the Australian Securities and Investments Commission, it does not always reflect how much is actually paid, nor does it itemise the amounts raised by different types of tax.
For instance, accounts show that Google paid only $74,176 in Australian tax in 2011, although the company argues that it paid significantly more than that. Although no firms were named by Mr Bradbury, the move is directed at multinationals such as Google and Apple, which have been criticised for using tax havens.
Last year, Mr Bradbury took the unusual step of naming Google and referring to a technique known as the "double Irish-Dutch sandwich" - whereby firms divert income using low-tax regimes like Ireland and the Netherlands.
The executive director of the Corporate Tax Association, Frank Drenth, said he had not heard of any other country targeting taxpayers' confidentiality as Australia was.
He said it was too early to comment on the effect of the proposed changes, as it would depend on how much information firms would be required to disclose.
The general manager of policy at the Institute of Chartered Accountants, Yasser El-Ansary, said the move was part of a global push to put more pressure on multinationals.
"It's going to be an area where there's going to be an ongoing focus, and not just by our government here in Australia but also around the world," he said.
Frequently Asked Questions about this Article…
The proposal would require large multinational firms to publish more detail about how much tax they pay to the federal government. It aims to expose companies seen to be avoiding tax through offshore arrangements and would also allow the government to publish more detail on mining taxes that was previously treated as confidential.
The article cites technology giants such as Google and Apple as examples of multinationals that have been criticised for using tax havens. It also refers more broadly to large resource firms in relation to mining tax disclosures.
Greater disclosure can help investors understand a company’s true tax burden and potential reputational or regulatory risk. Clearer tax reporting could change how investors assess profitability and risk, but the actual impact will depend on how much and what type of information firms are required to disclose.
Accounts lodged with the Australian Securities and Investments Commission often don’t itemise taxes by type or fully reflect the taxes actually paid. That means public filings can understate or obscure a multinational’s true tax payments in Australia.
The “double Irish–Dutch sandwich” is a tax technique that diverts income through low-tax jurisdictions like Ireland and the Netherlands to reduce a company’s tax bill. Investors should care because use of such structures can lead to scrutiny, changes in tax liabilities, and reputational risk for the companies they own.
Yes. The article notes a tension between the traditional principle that taxpayers’ affairs are confidential and a global push to reduce use of tax havens. The proposed measures would reduce the degree of privacy large companies currently have over their tax affairs in Australia.
Potentially. If the government publishes more detail on how much mining tax has been raised, investors would have clearer information about after‑tax returns and the effective tax burden on resource projects, which could influence valuation and investment decisions.
Yes. The move is described as part of a global effort to put more pressure on multinationals to be transparent about taxes. Industry groups quoted in the article acknowledged the international focus on curbing tax avoidance by large firms.
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