Multinational tax dodgers targeted

The Federal Government will close loopholes being exploited by multinationals.

Multinational tax dodgers targeted

Joe Hockey is pushing for the Federal Government to close loopholes which are being exploited by multinational companies to shift profits offshore, in orde to minimise these companies’ tax bills. Mr Hockey has suggested that the first target will be multinationals which load up debt in parts of their business located in high tax jurisdictions such as Australia. Proposed changes are expected to be legislated later this month, as it is expected that the opposition and the majority of all crossbench senators will give these changes their support.

Since 2002, Apple has paid just $193 million to the ATO, while an estimated $9 billion was shifted off-shore to minimise taxation. Google brought in more than $2 billion in revenue from Australian ad sales last year, but this money goes directly through its Singapore branch and no tax is collected or paid. Australia’s largest coalmining company, Glencore has paid almost no tax over the past three years despite income of more than $15 billion.

Mr Hockey is confident that the move to legislate against multinational companies avoiding paying tax in Australia will see $2 billion returned to the government over the next four years.

Read more from The Age.

Read more about Google.

Read more about Apple.

 

Opinion: We must all pitch in

Whether it is a company pillaging our land for resources or a company employing hundreds of our best and brightest researchers and exploiting our generous research grants, every company, whether local or multinational, should be made to pay their way.

For far too long, our Federal Government has sat back and watched companies such as Apple, Google and Glencore (there are many more which could be added to this list) funnel money earned in Australia out of the country without paying a fair amount of tax. Each of these companies does employ a significant number of taxpaying Australians, but the tax on profits made in our region which isn’t being paid is leaving a serious hole in our budget, a hole which has to be filled by average Australian taxpayers.

It’s quite simple. If you want to sell your product or operate in Australia, then pay your way. The Federal Government should be willing to go the extra step in and prevent a company which evades paying taxes from operating in our country altogether.

What do you think? Is this a step in the right direction for the Federal Government? Should the Federal Government threaten to ban companies, which continue to evade tax, from operating in our country? Or do we need their business?





    COMMENTS

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    3rd Jul 2014
    9:55am
    I reckon they should get back tax...there will be so much it will cover the deficit and put us in surplus for years to come...that's how much these companies have stolen from Australia
    Patriot
    3rd Jul 2014
    12:56pm
    But - it goes without saying that - this measure will be going back many years!?
    It is was you or me it certainly would!
    MICK
    3rd Jul 2014
    2:35pm
    It won't be retrospective Patriot. That is a dangerous precedent and will not happen. My hope is that what does happen is not a propaganda campaign against even this disreputable government as occurred with the mining tax when Labor was in. But then perhaps this would be a just punishment for this government which has behaved so badly. Imagine Abbott complaining about unfair treatment.....it brings a smile to my face.
    Jurassicgeek
    3rd Jul 2014
    9:57am
    I want to see,pollies chip in more, big business chip in more , government to stop sending money overseas to corrupt regimes in the form of aid , High income earners to chip in more and make Gina pay more...but leave the pensioners alone!!!
    Anonymous
    3rd Jul 2014
    11:00am
    All the above has been done .
    particolor
    3rd Jul 2014
    1:38pm
    Give all Politicians a Substantial Pay Rise..
    AND HURRT UP ABOUT IT !!.
    Before the Poor Barsteds Starve To Death !!..
    GOODBYE....
    MICK
    3rd Jul 2014
    2:41pm
    Pete: your comment defies logic.

    1. High income earners have a 2 year only deficit tax. At the same time they also have a 1.5% company tax reduction (they all own companies in their financial affairs) so they have a wonderful deal whilst average Australians are footing the bill.
    2. Overseas Aid is being trimmed but there is no discrimination between genuine 'Aid' and gift to the rich and/or military use of Australian Aid money.
    3. Gina.....come on guys, Gina has creative accountants, lawyers and I dare say overseas tax shelters as well. Don't think that Gina is going to pay.
    4. Pensioners - they're fair game because they cannot defend themselves as they refuse to unite and/or join a union and/or start a lobby group using their high voting power to change their political outcomes.
    So how has "all of the above been done"?
    Adrianus
    4th Jul 2014
    9:01am
    We are so busy squeezing the life out of our small business operators in Australia while big multinationals are paying their taxes in Ireland. Canada does ok by keeping company tax at a lower rate than USA. For the most part the global tax havens have been closed. I applaud Joe Hockey for his work in this area. However, he could go further and drop taxes on earnings in favour of increased consumption tax.
    Savo
    3rd Jul 2014
    10:29am
    This has been a problem for years. Simplify the tax system so that everyone pays their fair share of tax. NO EXEMPTIONS. Make mining companey's that are producing and making profits pay fuel tax not tax free as I understand it is at the moment
    MICK
    3rd Jul 2014
    2:43pm
    I believe that fair system you talk about is know as "GST". No escape for the rich and big business UNLESS governments allow loopholes, which they should not.
    And I agree with fuel tax exemptions. A rort as this is a tax deduction and should NEVER be a subsidy.

    3rd Jul 2014
    10:57am
    Well - they should pay their fair share of tax if they wish to operate here. It astounds me that often tax concessions are allowed on loans from parent company or similar in both Australia and back 'home'. Sounds like a double bite to me... good work if you can get it. I've long advocated that loans etc between 'sibling' or within 'family' companies - i.e. those that have a direct link between them -- should be treated as a loan to self - i.e. not a tax deduction.
    Anonymous
    3rd Jul 2014
    11:02am
    I also have long advocated a 'cash entry tax' on investment etc - which, for the gainsayers, I seriously doubt will reduce 'investment'. Profit hunters will still want to invest here, but I also was taken last night (I think) by a government minister commenting that Australian investors are not adding much to the mix (or similar). I rarely see opportunities being offered to them to do so - all I see is Clivagina Diggings etc negotiating with some Indian with billions built on crass exploitation of his people over there.

    I think there is definitely room for a solid Australian company/organisation to invest in resources here, thus keeping the cash at home.

    Also simplify the tax system - cut out all the redundant taxes like fuel excise (a de facto GST anyway) and either have a single tax such as a GST that covers all (plus a graduated income tax regime), or chop the GST etc and find a new tax. Some suggest a transactions tax is the best and covers all, including businesses.
    MICK
    3rd Jul 2014
    2:47pm
    We all want a fair tax system but don't expect Australian big business or any government to show any leadership or entrepreneurial skills. That is why we can rarely compete on the world stage. We have brain dead leaders and big business so all that we can successfully do is dig holes. Sounds to me like we have a bunch of neanderthals running the show. So what future do we really have whilst nothing changes decade in and decade out?
    Big Daddy
    3rd Jul 2014
    10:59am
    Savo, the exemption given to primary industry and those who work in the industry, as well as mining companies, is only for the portion that is not on roads as this was a road tax, solely for the betterment of our road network. Fishing fleets do not pay fuel ax as they do not use the roads to fish in.
    These and ither industries do actually pay the tax up front, but claim back when their BAS is done.
    I do agree that every individual and entity should pay the tax due on their/it's earnings, no exemptions.
    Wstaton
    3rd Jul 2014
    11:01am
    It will be interesting to see just how forceful this government will be on this our whether it will be just a token thing.

    I think that if these companies have been rortingthis way then ATO should be able to go back as long as it needs to recover tax. After all ifyou are a pensioner and have been overpaid then centrelink will recover it however far back you have been.
    Anonymous
    3rd Jul 2014
    11:08am
    I'll vote for token gesture with a veritable firestorm of rhetoric.

    Well I recall the statement from a A Man Named Vanstone on o
    'overpaid' pensioners - they can just sell their homes to pay their Centrelink bill!

    That is but one reason I totally reject any word from her mouth such as the Ideas of March commission of idiots. The woman is a petty fascist and a fool with not one human aspect to her (as are many such) - and we pay her handsomely every day.

    No pension until pension age for politicians and then means-tested; no handouts of 'board' positions on 'privatised utilities' etc, and no more handouts of soft jobs as the ambassador to somewhere nice.
    confucius
    3rd Jul 2014
    11:04am
    I hope rupert murdoch and news corp are also targeted as the ATO repaid them $800 million out of his total tax bill last year. But since the 'dirty digger's' oz papers backed Abbott and the Libs at the last election we shouldn't hold our breath.....
    Anonymous
    3rd Jul 2014
    11:10am
    In plain sight in the posts here and elsewhere - are the plain truths for any politician as to why the people are now so angry. The rorts, cronyism, lies, and petty tyrannies of the poor etc just keep on coming...
    heyyou
    3rd Jul 2014
    1:35pm
    I want some of what you all are smoking, no politician of any party is going to voluntarily agree to these ideas. Corruption is a mean beast, takes no prisoners. Look into Hockey's Queensland cattle farm, as a coincidence, live cattle shipments are about to start again.Uses Australian land to grow product then ships all produce off-shore to be sold (no Australian jobs or profit again). How often do you see this? Do you honestly think you can change outcomes when you have no power of veto over the people who are making these dishonest decisions?
    MICK
    3rd Jul 2014
    2:51pm
    The thing that western economies all have in common is that government and big business run the show. It is no different in any other nation and the ballot box is simply a matter of the faces, not the ultimate fate of the nation. The only way to beat the outcome is to vote for a whole pile of Independents who will shake up the game and destabilise the bastards who always get into the parliament. It matters not whether it be Liberal or Labor in charge as they are getting paid...so they play the game and disrespect us all.
    heyyou
    3rd Jul 2014
    3:10pm
    The trouble is that they are in for 3 years and no matter what they do you have to cop it. You can yell, jump up & down, threaten, march in protest but in the end they lie to your face. For the general population it is impossible to expel ministers no matter what, as shown by the lies of two of our prime ministers. Once your in power you can do anything even extend their tenure to 4, 5, years then retire on a big fat salary and laugh at the silly PAYE workers.
    THE SYSTEM HAS TO CHANGE.
    KerryC
    4th Jul 2014
    11:59am
    Remember when Kerry Packer was charged $6 in Tax and took it to the high court and won. Money Talks with this government, it is government of the rich by the rich for the rich. They won't do this. The pensioner, the disabled and the public health systems are such easy targets. And while they are at it, they ttakemoney away from the under 30's so that they will turn to crime. The poor hit yet again under True Liberal philosophy!

    3rd Jul 2014
    11:08am
    The ATO should get HOGES again.......lol
    particolor
    3rd Jul 2014
    3:14pm
    Now that's a Knife !!
    Gee Whiz
    3rd Jul 2014
    11:28am
    Don't forget big business are friends of government (all colors) because this is where they get their campaign funds (read bribes) from.

    To see this at work look no further than than the ICAC investigation into political corruption. The filth stretches from Federal parliament, to state parliaments, to local councils. And we are talking countless millions of dollars.

    A number of Queensland mayors have been caught up in this scandal, but brush it aside as if it is their just entitlement. One Mayor had over a million dollars sitting in a slush fund supplied by big business.

    But here is the galling part. ICAC claim that do not have the power to carry out prosecutions. They say the information from their investigations will be handed to the state governments and they are responsible for taking action.

    That must be the joke of the century. Can you imagine any government prosecuting politicians of any persuasion, either past or present , because they have been found to be corrupt. Pigs might fly but i haven't seen any so far.

    So don't place too much faith in Joe Hockey's blather about getting big business to pay their fair share of taxes. Won''t ever happen.
    MICK
    3rd Jul 2014
    2:54pm
    Its a perverse relationship and certainly not at arm's length. personally the ICAC needs to look at this and perhaps the talk about removing election funding by big business may be a start.
    The thing about Hockey's current rant is that he is after overseas business, NOT AUSTRALIAN OWNED BUSINESS which he would not entertain. If you think not then listen to his comments about the Commonwealth Bank scandal.....disapproving but refusing to back a Royal Commission....because he knows what will come out of such an investigation.
    Adrianus
    4th Jul 2014
    9:10am
    mick it is impossible to remove election funding from big business and big unions. If you put a credit card in an ATM what happens to the money? At least now we know half of what is happening. Better than not knowing anything.
    Mar
    3rd Jul 2014
    11:42am
    At last! As long as it is just not lip service. We will wait and see.
    unicorn
    3rd Jul 2014
    11:43am
    Joe's blather about getting them all to pay would be funny except it is damn serious imagine how much they get away with. They should pay for all of these trips overseas for their wives and families. And all stupid presents they choose to give the recipients. Has anyone noticed the gift Tony gave to Barak when he visited overseas lately He gave him a surf board ??? WHY??? It was the last thing Barak would want just because he was born in Hawaii did not make it okay to give such a useless gift. All the idiot had to do was use Google he would have found that Barak has interests in Baseball not Surfing.
    particolor
    3rd Jul 2014
    3:18pm
    Yes !! Barak should have given Him a couple of Balls back ??
    Adrianus
    4th Jul 2014
    9:17am
    Hawaii is where surfing started. However, Australians are among the best surfers in the world. The message is clear. We acknowledge what you have given the world but we are a resourceful and highly skilled nation. We are Australia!!! he he he.
    Reeper
    3rd Jul 2014
    12:06pm
    Apple has played the 'minor' computer company for years and became the friend of hackers and scammers alike as they were sucked in by this ploy seeing Microsoft as the BIG enemy. All the time Apple were infilitrating and growing whilst hiding the truth; they even turned the death of Steve Jobs into an advantage. They are now the biggest company in the world turning billions of dollars of profit for a company that is as closed shop as Scientology. They should be the first cab off the rank to pay for all the billions they have avoided paying in Australia (and every other country they are ripping off).
    gxh
    3rd Jul 2014
    12:13pm
    I'm no expert but I do know that for many years, there have been laws about "thin capitalisation" (restricting loans from overseas parent companies) and "transfer pricing" (restricting local companies from paying high fees to overseas parent companies). Many legitimate companies struggle with these rules, so it surprises me that the Glencores and Googles of this world somehow still seem to use these techniques. I wonder if it's a matter of the rules not being adequate, or a lack of proper enforcement? If the rules aren't adequate, then they need to be tightened, even though this will make life more difficult for the guys who already "do the right thing".
    Tom Tank
    3rd Jul 2014
    12:56pm
    I will wait and see on this as perhaps it is only window dressing to make appear that Tony/Joe is after the top end of town. They are in all sorts of bother because of their budget which is generally considered to be unfair.
    As other contributors have said election funds are provided by these companies and they expect a return on that particular investment.
    Australians deserve to know how much funding is given to political parties and by whom. Definitely a case for a Royal Commission into politiocal party fundraising but don't hold your breath waiting for one.
    MICK
    3rd Jul 2014
    2:58pm
    The proof of the pudding is in the eating Tom so I also await the end result....which I hold serious doubts for. But perhaps the fat lady will sing in this case anyway.
    Adrianus
    4th Jul 2014
    9:23am
    They did say everyone must share the burden of the previous government's incompetence. I'm willing to take that on face value until they prove otherwise.
    KSS
    3rd Jul 2014
    2:06pm
    It seems some people here will never be happy no matter what is suggested or proposed. The comments here are in negative territory even though many have been demanding this very action.

    There are accusations of 'rorting the system' by big business. Whilst I accept that wherever there is a system, there are those who will attempt to circumvent it for their own profit, it is not rorting if they are following the law. As such demands to take retrospective action are ludicrous. Yes individuals will be pursued by the RTO, Centerlink and other institutions for violations going back years because they were AGAINST the law and therefore criminal.
    What these multinational businesses are doing may be immoral but it is not illegal. There is a difference! Before people rush to condemn the Government for acting on this, can't you wait and see what the proposals are?

    As far as I am concerned, if you earn income in Australia, you pay tax in Australia under Australian taxation laws. Yes the laws need reviewing to change the, thus far, generous rates offered to multinationals but this must also be balanced with the potential affect on employment.

    Incidentally have any of you noticed the creeping tendency for companies to use offshore accounts? I have had the experience for example when buying internet security products from McAfee - who have large plush offices in Sydney. Given this is software, you can purchase on-line and download direct to you computer. Obviously you pay on-line too. You get a invoice in Australian dollars, from a company in Australia with an Australian address. You pay, then when your bank statement comes you find you have an international transaction fee! You then discover your payment was actually to an account in another country and therefore in a foreign currency. You are not warned or told about it, it just shows up on your statements and you have paid more than you bargained for. This is another way that companies are avoiding paying tax in Australia.
    MICK
    3rd Jul 2014
    2:59pm
    Don't buy McAfee then. Not the best internet security software anyway. I take your point though.
    Tom Tank
    3rd Jul 2014
    3:13pm
    The statement on loss of employment is the same old "Furphy" trotted out whenever there is a suggestion that companies should pay more. This excuse has been used since Adam was a boy and is quite false.
    If Apple are going to make a profit here they will stay here and that goes for other big corporations as well.
    No private company employs more staff than they need, in fact most are employing less than they need to service their customers properly.
    KSS
    3rd Jul 2014
    3:59pm
    I don't Mick but they are not the only company doing this and there is no way to tell until your bank statements come through.
    wally
    3rd Jul 2014
    2:07pm
    I think the government should raise the amount of tax the large international companies pay. The question is how much? Will the amount of corporate tax the big companies pay be more than the income tax their Australian employees pay? If the government gets too greedy in its tax demands, the big companies might close their Australian operations and go overseas, leaving their workers unemployed and the government going with out the tax dollars the former employees would have paid. How much income tax will the one time Toyota, Ford and GM Holden workers pay after the car makers finally close up shop? As long as it is cheaper doing business in Asia, the government needs to be very careful in raising corporate tax. Maybe they could do it increments based on profit, as one example, but care would have to be taken by corporate creative accounting in calculating taxable income.
    Waytoopoortobeme
    3rd Jul 2014
    2:24pm
    Yes Yes Yes, Like Australia's largest Coalminer, paying almost Zero Tax over 3 years despite Income of 15 Billion!!!!
    Waytoopoortobeme
    3rd Jul 2014
    2:27pm
    4got to ask, Why Why Why!!!!!
    MICK
    3rd Jul 2014
    2:32pm
    It has been well known that multinationals shift tax to low or zero tax regimes...for many years. It is long time that something was done as local taxpayers make up the difference. So why is Hockey moving? Is it because local big business has been in his ear?
    While we are at it why not close the loop holes for the rich and big business IN AUSTRALIA as well. But depend on the fact that this government will not touch the domestic rorters whilst it continues to target wage and salary earners.
    Grateful
    3rd Jul 2014
    8:00pm
    Spot on Mick. Just populist garbage. More being ripped off and rorted by Australian individuals with superannuation, negative gearing and from the age pension and health card.
    But, as you said, that would be a certain vote loser.
    particolor
    3rd Jul 2014
    10:45pm
    They would Tax Kangaroos if they could !!..How much Ya got in Yer Pouch there Skippy ??
    Not Senile Yet!
    3rd Jul 2014
    8:50pm
    Abbot & Costello do not control the Senate....so anything they do would need the Independants vote.
    Big business can and will bring pressure to bear on anyone trying to over tax them. Have you all forgot the millions spent on the Anti-Mining Tax proposed by Krudd!
    Same thing will happen and good old Rupert & Co will make a killing
    and give them discounts....Mates Rates!
    This is all Blah! Blah! Blah! ....to diminish distract from their real intentions.....getting rid of Medicare altogether and phasing out Pensions altogether.
    These Party Machine Puppets are not our Servants......nor do they consider themselves to be so........they are our Masters!
    That's why they are all smiling and joking.....they know that the joke is on the Taxpayer and worker.......because they have them to thank for their positions and Perks!
    Vote the CREEPS out......stop voting for any Party Controlled Puppet.....Vote Independent from now on!
    particolor
    3rd Jul 2014
    10:42pm
    Absolutely RIGHT !!

    3rd Jul 2014
    11:38pm
    This is what Hockey should have gone for in the first place, instead of pensioners! It will be interesting to see how far he gets!
    Radish
    4th Jul 2014
    4:09pm
    wonder why Labor didnt go after them when they were in office??
    Bella
    4th Jul 2014
    9:10am
    We should take a page out of Dubai book, the citizens are so well cared for from profits of their resources. They even have shops with food for unemployed ...not that there is many of them. We have such rich resources here, we as Australians should be living like kings...but the system we work and live by is all arse up.
    particolor
    4th Jul 2014
    9:33am
    No hope ! When Speedo Boy's favirite show is Gimme Gimme Gimme !!
    Dotty
    4th Jul 2014
    11:32am
    It doesn't matter who or what the Company are if they generate money within Australia then they should pay tax on the lot not go to an offshore bank and make more Billions on it!
    I say this should have been legislated years ago and maybe we would not have had to have borrowed so much !! Dotty
    Radish
    4th Jul 2014
    4:09pm
    Good on you Joe...all for getting "anyone" who dodges tax or rorts the welfare system as well.
    Grateful
    4th Jul 2014
    7:21pm
    Bet he doesn't touch the millionaires getting part pensions and Health Benefits Cards!!!!
    Radish
    5th Jul 2014
    8:53am
    It is not only millionaires who are getting part pension and health benefits cards.
    However, if people pass the assets and income test that are currently in place there is nothing that can be done.

    I still think the assets test is far too generous and needs to be lowered.
    Wstaton
    4th Jul 2014
    5:52pm
    You know when pensioners have their savings seen as they get interest when maybe they don't called deeming. Maybe companies should have the equiverlent on their revenue.
    Not Senile Yet!
    4th Jul 2014
    10:12pm
    Oh yeah! Workstation.
    Bring it on ! But hand on! ...will the Party Machine who gets all their income from donations from these Big businesses allow the Comedy Duo to implement such a thing as Deeming on Companies?
    Remember.....it is a suggestion...just to distract!
    The intention is not real.....No Back Room Party Animal would ok it.....their donation would dry up over night!
    Nice Dream Though!......smiling at the thought of it!
    Neeney Doc
    8th Jul 2014
    1:27pm
    $2 Billion over 4 years? Is that all? Peanuts. Is Joe really going to do it? Or is it 'talk, promise, talk'. At least the G20 have it on their agenda
    Gee Whiz
    8th Jul 2014
    2:30pm
    The Murdoch press has now joined forces with the LNP at both federal and state levels.

    Their biased reporting and editorials are surreptitiously urging everyone to vote For Abbott or the the LNP party in their state despite a voter backlash.

    The Queensland Courier Mail is probably the worst example of bias i have ever seen. It is blatantly supporting the corrupt Newman government and despite the polls showing the people judged Newman to be on the nose the Couriers editorials claim he is doing a good job.

    What part of voter dissatisfaction the paper doesn't understand says volumes for its disloyalty to its readers.

    I buy the paper six days a week. Or should i say i used to. Any paper that can't tell the truth is not worthy of my support. So after fifty years its goodbye to a once great news paper that has no become nothing more than a tabloid rag.
    Wstaton
    8th Jul 2014
    5:48pm
    For interst sake you can find a list of papers New Corp owns here.

    http://en.wikipedia.org/wiki/List_of_assets_owned_by_News_Corp

    I am thankfull to see he does not own any of the local newspapers in my are.

    Can't remember when I last bought a the Herald Sun the Melbourne newspaper.
    unicorn
    12th Jul 2014
    4:46pm
    Yes. it makes me sick just the other day quite by accident that the country's biggest & cheapest on line pharmacy is one of these off shore companies. No wonder they can give the stuff away at such cheap prices.
    unicorn
    21st Sep 2014
    9:49am
    Wake up Joe I've been sayung this for AGES MOST OF THE TROUBLE IS THAT THE RICH GET AWAY WITH IT BY HIRING SMART ACOUNTANTS. The rich e.g. Gina Reinhardt pay almost zero by using the "company" car plus
    almost anything you can name belonging to the comany therefore becoming tax "dodgers" or deductions.