Offshore tax crackdown
UP TO $1.9 billion in tax revenue could be at risk if the government cannot pass changes to crack down on profit shifting by multinational companies, Treasury says.
In rules that are fiercely opposed by several global companies, the government is pushing for retrospective changes to the laws on ''transfer pricing'' - trade between different parts of a global company.
The changes could affect tax disputes going back to 2004.
Treasury has told a Senate committee the changes are vital to protect up to $1.9 billion in revenue that is being disputed.
Transfer pricing rules relate to the prices charged in trade between different parts of a global business. It is an area where the Australian Tax Office has suffered big legal defeats, prompting the government to propose the changes last year. The bill, which passed the House of Representatives last month and is now being investigated by a Senate committee, has been attacked by corporate powers including the Minerals Council of Australia, Chevron, and the American Chamber of Commerce in Australia.
The lobby group for American companies - the biggest source of foreign investment in Australia - claims the changes are ''highly discriminatory'' against the US because they will only apply to countries with which Australia has tax treaties. It urged the committee to recommend the government cancel the retrospective operation of the law, saying it would hurt investment.