Global firms accused of diverting profits offshore to lower their tax bill will come under fresh scrutiny in Australia after new laws were introduced yesterday to ensure they pay their “fair share of tax.”
The bill was put before parliament amid an international push to stop firms using complex corporate structures to avoid tax, and targets more than 1,000 multinationals generating turnovers of more than A$1 billion (US$700 million), Australian Treasurer Joe Hockey said.
The complex methods allegedly used by firms include booking revenue in lower-taxing countries to reduce tax on profits in higher-taxing jurisdictions, with governments collectively losing billions of dollars in the process.
“It is patently unfair for a large multinational with sophisticated structures not to pay its fair share of tax,” Hockey told reporters in Canberra.
“Under this new law, when we catch companies cheating, they will have to pay back double what they owe, plus interest,” the treasurer added in a statement.
Australian Tax Office Commissioner Chris Jordan said the bill also strengthened his agency’s abilities to go after firms that continue to shift profits to lower-taxing nations such as Singapore, adding that there were currently “billions of dollars” not being booked locally.
Hockey said the new laws would take a different approach from Britain, which in March introduced a so-called “Google tax” on companies that divert profits overseas, although treasury officials have been working closely with London on the issue.
The legislation will require public companies with income of more than A$100 million a year to disclose their tax affairs from Dec.1.
Rules will also be tightened so heavily geared firms cannot shift profits overseas through the guise of paying interest, while funding to the Australian Tax Office will be boosted to increase its focus on tax avoidance.
Hockey said at this stage he could not put a number on how much more corporate tax could be raised through the amendments.
An Australian parliamentary inquiry into corporate tax avoidance last month recommended naming and shaming firms that avoid paying tax, after hearings with senior executives from giants such as Apple Inc, Google Inc, Pfizer Inc and Johnson & Johnson.
The firms said they had operated within local and international tax laws.
International efforts to tighten laws have been led by the Organisation for Economic Co-operation and Development.
Under the G20, which encompasses the world’s top 20 economies, Hockey said that “very integrated and ... wide-ranging” proposals on how to allocate profits from multinational firms between countries were also being discussed.
From the customer’s perspective, car rental is a straightforward business. The only uncertainty is whether the hire company will charge you for the scratch they discover when you hand back the vehicle. Hertz Global Holdings Inc’s bankruptcy protection filing on Friday last week was a reminder that today even the simplest business models are underpinned by a lot more financial complexity than meets the eye. The proximate cause of Hertz’s demise was of course the sudden collapse in bookings caused by COVID-19 travel restrictions. The company’s monthly revenue last month fell 73 percent year-on-year, a shortfall that even the most resilient
Uber Technologies Inc, Lyft Inc and Airbnb Inc have slashed thousands of jobs. Salesforce.com Inc and Visa Inc are letting employees work remotely for months; Twitter Inc and Square Inc are allowing them to do so for good. For the companies’ hometown of San Francisco, the moves are early signs of a dire blow. In a city with a long history of booms, busts and natural calamities, the COVID-19 pandemic has suddenly upended nearly a decade of prosperity. While municipalities across the US are grappling with economic fallout from the virus, San Francisco stands to take a deeper hit given its high
BULK PURCHASE: The French chain and Hong Kong-based Dairy Farm International reached a deal covering 224 stores, which is expected to be finalized by year’s end Carrefour SA yesterday announced it would acquire Wellcome Taiwan Co (惠康百貨) for 97 million euros (US$108.33 million), and bring all the Wellcome supermarkets (頂好超市) and Jasons Market Place stores nationwide under its banner within 12 months of the deal closing. The France-based hypermarket chain reached an agreement with Hong Kong-based Dairy Farm International Holdings (牛奶國際控股), the pan-Asian retailer that launched Wellcome Taiwan in 1987. The transaction involves 199 Wellcome supermarkets, which have average sales areas of 420m2 and 25 high-end Jasons Market Place stores, which have an average sales area of 820m2, as well as a warehouse in Taoyuan, Carrefour Taiwan (家樂福)
‘ONE-STOP SHOP’: A Miaoli official said that the factory in the Jhunan section of the Hsinchu Science Park would create more than 1,000 jobs and boost prosperity A new high-end IC packaging and testing plant planned by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in Miaoli County is expected to start operations in the middle of next year, Miaoli County Commissioner Hsu Yao-chang (徐耀昌) said. Hsu wrote on Facebook that TSMC, the world’s largest pure wafer foundry operator, would invest NT$303.2 billion (US$10.1 billion) to build the plant, the largest-ever single investment in Taiwan. However, TSMC declined to disclose the financial terms of the deal, while a company board meeting on May 12 approved a spending plan worth NT$168.2 billion as part of its investment plans. Construction of the