Tax office will ‘camp out’ at multinational offices in bid to clamp down on tax minimisation

google logoThe Australian Tax Office has told Mumbrella it will leave no stone unturned in its quest to force multinationals to pay the correct amount of tax as it confirmed 10 companies are being probed by auditors.

Google is reportedly one of the firms under scrutiny as pressure mounts on multinationals to cease their tax minimisation practices. Commissioner Chris Jordan warned businesses the ATO will “camp out your offices” in a bid to uncover suspected tax minimisation.

The ATO declined to identify the 10 companies but said it will step up efforts to ensure businesses pay tax in Australia on locally-earned income.

Companies like Google have been repeatedly criticised by local media owners for carving out a huge chunk of advertising revenues from the Australian market and then taking it offshore, paying down the amount of tax going back into the economy at the same time.

Jordan said 86 cases were selected for review this year, with 30 now completed, a third of them tech firms. The ATO has collected $204 million and said it expects to raise more than $1bn over the next three years.

“Further reviews have commenced and we expect 70-80 reviews will form part of our ongoing program of work. We expect to commence around 10 audits where we have identified a number of concerns,” Jordan said.

He warned multinationals there would be no place to hide.

“The message to multinationals is that we will test what you tell us, we have more information than ever before to test your assertions,” he said. “If you are open and meeting your tax obligations we will work with you.

“If you are not being honest about your activities, then we will go through every transaction, we’ll talk to your customers to verify your claims and we will camp out at your offices checking everything you tell us.”

Jordan said there was “unprecedented and powerful international cooperation to address profit shifting issues”

“The Organisation for Economic Co-operation and Development is focused on the issue with its BEPS (base erosion and profit shifting) action plan and it was a key issue at the G20, which Australia has chaired this year,” he said. “By tackling BEPS issues we can ensure multinationals pay tax in the jurisdictions where they make a profit, ensuring all jurisdictions get their fair share of revenue.”

Mumbrella was waiting for comment from Google.


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.