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Australia in Corporate Tax Crackdown
World Economy

Australia in Corporate Tax Crackdown

Australian Treasurer Joe Hockey has said the government will introduce a new tax crackdown against 30 multinational corporations.
Without identifying the targets, Hockey said the big corporations were “diverting profits earned in Australia away from Australia to no-tax or low-tax jurisdictions”. He described the crackdown as “the first of its kind in the world”, BBC reported.
The legislation will be introduced to Parliament on Tuesday.
Hockey said it was “pretty evident” which companies would be targeted. Big multinational firms such as Google, Apple and Microsoft have been accused of moving their profits to countries with lower rates of tax.
The move will see Australia join the UK in its bid to tackle alleged tax avoidance by big firms, although Hockey said the proposed legislation would go “much further” than Britain’s current tax laws.
Australia’s tax crackdown announcement comes a day ahead of the publication of the government’s 2015-16 budget papers, when it will set out its proposed revenue and expenditure in the following financial year, and its fiscal policy for several years after that.
The new law would allow the Australian Taxation Office to charge tax on profits diverted offshore. The legislation would come into effect from January next year, but must first be passed by parliament. More detail about the tax crackdown is expected to come with the budget.
A large slice of Australian government revenue comes from royalties paid by mining firms on commodities such as iron ore and coal.
But Hockey said last month the government faced a multi-billion dollar revenue loss due to a plunge in the price of iron ore. Despite this, the government has said it remains committed to achieving a budget surplus.

 

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