Tax Office casts for biggest fish
A new Tax Office taskforce will investigate corporate tax dodging by Australia's biggest companies, in its latest effort to crack down on cheats and bolster government revenue.
The unit will work closely with international partners to establish the purpose of Australian businesses in low-tax jurisdictions.
It will also investigate whether highly profitable international companies doing business in Australia, such as Google and Apple, are deliberately avoiding Australian tax by moving profit centres overseas.
Tax Commissioner Chris Jordan said the taskforce was a "small but high-level and experienced unit" headed by deputy Commissioner Mark Konza.
"These are highly aggressive structures people are putting in place," he said. "The Tax Office has responded to community concerns by forming a special unit headed up by one of the most senior leaders in the Tax Office."
Mr Jordan said the unit, which began work on Monday, would draw on resources from the international big business area of the Tax Office, and would receive specific funding.
He said its role would involve multi-country audits to expose evidence of profit shifting. It will investigate clients of big businesses.
"In one of the UK inquiries [into profit shifting], one of the major customers of one of these companies knew nothing about an Irish company, they just dealt with someone around the corner," he said. "If you know nothing about them, does that really stand up? They're the sorts of things we'll be testing."
Ireland, which has a low company tax rate, is the location of a Google subsidiary that the company says sells advertising to customers in Australia, through another subsidiary in Singapore.
Google paid just $74,000 in Australian tax in 2011, despite an estimated $2 billion in revenue from Australian ads.
Despite highly critical public inquiries on the tax strategies of the internet company in the US and Britain, no such inquiry has been held in Australia.
Documents filed by US congressional investigators this year showed Apple products made in China are resold to Apple retailers in Australia after an Irish subsidiary takes ownership of them, on paper, to collect the profits.
The commissioner would not say whether Google or Apple were among the companies being pursued by the Tax Office.
The Tax Office would "make sure that the assertions these companies make are, in fact, happening", he said.
According to a report by the Uniting Church's social justice unit, almost two-thirds of Australia's top 100 companies listed on the stock exchange had subsidiaries in tax havens or low-tax jurisdictions.
On Friday, the government passed laws requiring large companies to report to the Tax Office on where their profits were earned and where they paid tax.
But, despite efforts to make the tax system more transparent, Mr Jordan would not support full public disclosure of company tax payments. "I don't think we're ready for a name-and-shame approach," he said. "That's probably not the answer."
Mr Jordan said it was up to the government to decide whether to launch an inquiry.