Federal Politics

ATO warns 60 multinationals 'enough is enough' on tax avoidance

The Tax Office has warned 60 multinational companies to "stop gaming the system" and start paying their tax.

And another five companies with revenues of more than $5 billion have been placed on the ATO's "high-risk" watch list. Previously only News Corp was in the high-risk category.

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Tax Commissioner's remarkable spray

The tax office is calling out multinationals, telling them 'enough is enough', to stop gaming the system and to pay their fair share of tax.

In his most strident comments to date on the festering issue of multinational tax avoidance, Australian Tax Commissioner Chris Jordan said he had run out of patience with slick global companies that refuse to produce even the most "basic reports" on their profits and tax liabilities in Australia.

"Enough is enough", he told a Senate hearing on Wednesday in relation to what he called the "operate here and bill overseas business model" of some multinational firms.

Tax Commissioner Chris Jordan says sometimes, when businesses are not doing well, they want to blame the ATO.
Tax Commissioner Chris Jordan says sometimes, when businesses are not doing well, they want to blame the ATO. Photo: Dominic Lorrimer

Apple, for example, came under fire in January when it was revealed the tech giant paid taxes of just $85 million in Australia last year on sales of $7.9 billion.

"The excuses we hear from these companies are frankly over the top –how is it possible that companies known for their new-age technology and innovative products and services, fail to be able to furnish us with basic reports showing their business structures, their profits, how much tax they've paid and where?", Mr Jordan said in reference to the 90-odd multinationals he has under the microscope.

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"Their clear tactic is to delay and obstruct. They game the system."

"These companies have pushed the envelope on reasonableness. They play games, they string us along, they believe we can be stooged. Enough is enough. No more. We will be reasonable with those that genuinely cooperate, but we will now take a much harder stance on those who do not."

Mr Jordan said more letters would go out in the coming months, with "immediate reviews and audits" likely to follow.

His attack on multinationals will be music to Treasurer Scott Morrison's ears. He is keen to be seen to be doing enough on the "top end of town" while looking around for budget savings that are likely to see middle and lower-income earners bear some of the pain.

Mr Jordan did not name the five new public companies to be placed on the "high-risk, high-consequence" watch list alongside Rupert Murdoch's News Corp.

The ATO has also appointed former Federal Court judge Garry Downes to advise on settlements with companies who owe back taxes. Justice Downes is a former president of the Administrative Appeals Tribunal.

In the past year, the ATO has received court decisions against gas giant Chevron over a tax issue dating back to 2004 and chemicals company Orica, which was ordered to pay $40 million and interest.

Mr Jordan said 50 audits and 350 reviews of large public groups conducted last financial year delivered $1.6 billion in cash to the ATO.

He told senators he was confident he now had sufficient powers to extract the right amount of tax from the biggest companies.

Following last year's Senate tax avoidance inquiry - which was prompted by Fairfax Media reports into how little tax some of the biggest companies are paying - former Treasurer Joe Hockey introduced a new multinational anti-avoidance law targeting 1000 companies with revenues of more than $1 billion.

The government has also introduced laws to clamp down on "thin-capitalisation" and "transfer pricing" - key planks in the "operate here and bill overseas business model".

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