Push to 'name and shame' tax haven users
GLOBAL corporations, including Apple and Google, will be made to disclose how much tax they pay the federal government, under a plan to name and shame firms that are seen to be dodging their responsibilities by using tax havens.
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.