Treasurer Joe Hockey has warned multinational companies they won’t get away with dodging tax in Australia for much longer as the government works with the UK to crack down on profit shifting.
Britain has announced a 25 per cent “Google tax” for multinationals that avoid paying tax locally and Australia has been exchanging information with its government.
Hockey says Australia led the charge on tax avoidance throughout last month’s G20 summit in Brisbane and is also cracking down on the practice domestically.
The government has injected 60 new staff into the Australian Tax Office to uncover culprits.
Hockey says there are “new and stronger” links between the ATO and other tax offices around the world and clever accounting to hide profits is “coming to an end”.
“I’m absolutely determined to ensure that everything is done to make sure people and companies who earn money in Australia pay tax in Australia,” he said.
It’s estimated tax avoidance could cost the government between $1 and $3 billion each year.
However, while Hockey says new resources have been allocated to the ATO to focus on multinationals, the office has also shed more than 2000 staff in the past year.
Hockey said tax officials had been embedded in the offices of 10 multinationals operating in Australia.
They would determine whether the companies were paying their fair share of tax in Australia.
“This is part of a co-ordinated effort from the Australian government,” Hockey told reporters in Canberra.
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The treasurer said the government was looking at new laws which would give the ATO extra powers.
“I’ve been in discussion with the Treasury and the Australian Taxation Office about that,” Hockey said.
The tax law would be tested in a number of court cases in 2015.
“In the interim, we are contemplating further measures that will give the Australian Taxation Office the power to get the sort of information they need,” the treasurer said.
