Name and shame: tax transparency plans
Global giants including Apple and Google will be forced to reveal how much tax they pay the federal government, under a plan to name and shame firms seen to be dodging their responsibilities by using tax havens.
The proposed crackdown, announced today, would also clear the way for the government to publish more detail on how much mining tax resources firms are paying. Until now, the government has refused to say exactly how much money the mining tax has raised, citing the need for taxpayer confidentiality.
A fundamental principle of tax law is that the affairs of all taxpayers, from individuals to corporate giants, are kept secret.
But with governments around the world seeking to protect their budgets against use of tax havens, especially by technology firms, large companies operating in Australia may no longer enjoy such privacy.
Federal Labor hopes to pass legislation before the September election that would require large firms to publish more detailed information on how much tax they pay.
Treasury is currently looking at how to implement the change, ahead of a meeting of a high-powered working group meeting later this month.
“Large multinational companies that use complex arrangements and contrived corporate structures to avoid paying their fair share of tax should not be able to hide behind a veil of secrecy,” the Assistant Treasurer, David Bradbury, said.
Although no firms were named by Mr Bradbury, the move is directed at global firms such as Google and Apple, which have come under fire around the world for their use of tax havens.
While some tax information can be gleaned from accounts lodged with the corporate regulator, they do not always reflect how much was actually paid, nor do they break down the amounts raised by different types of tax.
Accounts show Google paid just $74,176 in Australian tax in 2011, though the company argues it actually paid more.
Apple was last year slapped with a bill for $28.5 million in back-taxes, taking its total tax bill for the year ending September 24, 2011, to $94.7 million.
The latest move comes after Mr Bradbury last year took the rare step of naming Google and referring to a technique known as the ‘‘Double Irish Dutch Sandwich’’ - where forms divert income through low-taxing Ireland and the Netherlands.
The executive director of the Corporate Tax Association, Frank Drenth, said he had not heard of any other country targeting taxpayer confidentiality in a bid to pressure firms.
Mr Drenth said it was too early to comment on the impact of the changes, as it would depend on how much information firms would be required to disclose.
The general manager of policy at the Institute of Chartered Accountants, Yasser El-Ansary, said the move was part of a global push by developed nations to apply increasing pressure on multinationals.
‘‘It’s going to be an area where there’s going to be an ongoing focus, and not just by our government here in Australia but also around the world,’’ he said.