Potential areas of unilateral action to protect Australia's revenue base
This chapter explores the potential for Australia to undertake
unilateral tax reform in specific areas that either will not undermine the work
of the BEPS program or are not within scope of the OECD work. As this is only
an interim report, the chapter does not explore all the areas of unilateral
action that the committee considers are important.
Scope for unilateral action
As noted in the previous chapter, the committee supports the efforts of
the OECD in developing a coordinated response to base erosion and profit
shifting. However, Mr Saint-Amans highlighted one of the major shortcomings of
the BEPS program:
Countries are sovereign, so what is agreed at the OECD is morally
binding but it is not legally binding.
Consistent with this, the Treasury scoping paper, Risks to the
Sustainability of Australia's Corporate Tax Base, noted that:
There are some actions Australia can and has taken
unilaterally; these are primarily focused on improvements that can be made
without significant divergence from international tax settings.
As such, there may be value in Australia proactively continuing to
identify potential risks to the integrity of the corporate tax system and take
assertive actions to address these risks. Indeed, Associate Professor Ting
contended that it is unlikely that the BEPS project will be a complete success:
...while Australia should continue its support of the OECD's
BEPS Project which strives to achieve international consensus on solutions to
address BEPS issues, it is doubtful if the Project will be a complete success.
Therefore, Australia should consider appropriate unilateral actions to
complement the international effort.
Risks associated with unilateral action
A number of stakeholders warned the committee about the risks associated
with taking unilateral action to address base erosion and profit shifting
before the finalisation of the BEPS project. For example, the Corporate Tax
Association contended that Australia risks compromising its commodity revenue
base if tax reform is not coordinated.
Taking unilateral action invites reprisals and risks double
tax outcomes, which is highly inimical for investment and jobs...
Changing the source/residency rules in a more co-ordinated
way would be far preferable, albeit challenging as it would essentially involve
a negotiation between nation states over taxing rights. Australia in particular
would need to tread carefully in case it jeopardises its revenue base relating
to our huge volumes of commodity exports.
The Business Council of Australia reflected on the potential effect of
unilateral action on a coordinated response:
Unilateral action outside of the BEPS project may encourage
other countries to act alone and splinter international taxation norms, risking
unintended consequences including double taxation and distortion of genuine
Unilateral actions may not necessarily conflict with the BEPS program
where they are outside the program's scope or where the proposed BEPS actions
do not align with the problems facing Australia's corporate tax regime.
Australia has progressively strengthened its tax regime in a number of
areas targeted by the BEPS project and these initiatives may not require substantial
changes to bring them into line with the proposed BEPS actions. Mr Andrew
Mills, Second Commissioner of the ATO, has noted the strength of Australia's
corporate tax laws in relation to some of the BEPS action areas:
Because of changes over recent years we [Australia] have
probably the strongest anti-avoidance and transfer pricing rules in the world.
A number of companies compared the strength of Australia's tax regime
favourably with other jurisdictions in relation to multinational activities.
For example, Brambles submitted that:
...Australian tax laws are among the most stringent laws in the
world, having regard to comprehensive rules on controlled foreign companies
('CFC's'), transfer pricing and anti-avoidance, thin capitalisation, debt vs
equity, to name a few examples.
These sentiments were echoed by BHP Billiton which considered that:
...Australia comes to the international policy debate with a
comprehensive suite of laws to safeguard the integrity of Australia's corporate
tax system. These laws include general anti-avoidance rules, specific
anti-avoidance rules, transfer pricing, thin capitalisation and controlled
foreign company rules...
Australia's controlled foreign company rules aim to prevent
erosion of the Australian tax base through shifting income to jurisdictions
that do not impose tax or that impose tax at low rates. Together the rules act
as a deterrent to taxpayers engaging in unacceptable corporate tax avoidance.
It also observed that during 2013, Australia had:
strengthened its general anti-avoidance rules and specific
anti-avoidance rules which are now considered amongst the most rigorous in the
made significant amendments to reinforce Australia's rigorous
transfer pricing and thin capitalisation rules.
While Australia has considerably strengthened rules around transfer
pricing, debt loading and thin capitalisation, more can be done in the design
of the tax system governing multinational corporations to reduce the
opportunities for tax avoidance and tax planning arrangements that are not in
keeping with the intention of Australia's tax laws. The committee notes the
proposals announced as part of the 2015–16 Budget to implement some of the more
advanced BEPS action items and the introduction of unilateral measures to
counter the avoidance of permanent establishment.
That said, the committee was also presented with information that
indicated some aspects of the corporate tax system could be strengthened
without jeopardising multilateral efforts. The areas where the committee
envisages scope for the Australian government to take unilateral action are:
improving public transparency;
addressing permanent establishment issues; and
removing tax competition that disadvantages Australian businesses.
Improving public transparency
During the course of the inquiry, the committee was surprised to learn
how little is known publicly about the potential size and scope of the
aggressive tax minimisation measures and tax avoidance schemes used by large
Australian corporations and multinationals operating in Australia. It was also
taken aback by the reluctance of some companies to disclose information to the
committee, or, of greater concern, where some companies seemed not to be in
possession of what seemed important information about their company's
operations in other countries.
Indeed, one of the main difficulties the committee faced was gathering
and making sense of the information about business activities and tax
obligations. This paucity of information meant that the committee was unable to
determine the extent to which tax avoidance was a problem and what needed to be
done to address it. Moreover, Treasury, as the main policy advice agency in
this area, indicated in relation to base erosion and profit shifting that:
This is a huge issue for us. As to how big an issue and to
putting a figure on it, we just do not know.
It is apparent that there are risks to the integrity of the tax system
as a result of the changing composition of the economy and the increasing
importance of multinational companies in delivering products and services. It
is not apparent, however, the extent to which aggressive minimisation and
avoidance are reducing the corporate tax revenue base.
There is no doubt that public confidence in multinational corporations
'paying their fair share' of tax would be increased by greater public
transparency of financial information. Indeed, it may be the case that pubic
exposure would put pressure on companies to conduct their affairs with regard
to their public reputation. The Uniting Church of Australia, Synod of Victoria
and Tasmania, highlighted research that indicated many companies were concerned
about reputational risk associated with non-compliance with tax laws.
How much is too much?
It can be difficult getting the balance right between public provision
of information and ensuring that commercial operations are not jeopardised by
the release of sensitive information.
The issue of how much information about companies' activities and tax
obligations should be available in the public domain was fiercely debated,
particularly at hearings. At stake is the right of corporations to have
commercially sensitive information remain private versus the right of the
public to be able to scrutinise a corporation's tax affairs.
Making more information available for public scrutiny is necessary to
build and maintain confidence and trust in the integrity of the tax system
among the broader community. By doing so, these actions would be a means to promote
greater levels of compliance across all taxpayers where it could be seen that
everyone was 'paying their fair share' and those that were not could be named
and subject to the court of public opinion.
Greater transparency may also help to reduce the confusion surrounding
corporate tax. As Mr Herefen explained to the committee:
It is important that the community is well informed because
we are dealing with complex issues that are easily confused.
The committee would like to acknowledge the efforts of companies that
publicly report the amount of tax paid in the jurisdiction where they operate.
For example, Rio Tinto produces an annual report on taxes paid by tax type and
jurisdiction. According to Mr Chris Lynch, Chief Financial Officer of Rio
Tax transparency...assists the fight against corruption and
enhances the scope for communities and citizens to hold their governments to
The committee, however, is dismayed by the ingenuity shown by some
companies in avoiding answering questions posed by the committee. This
reluctance verged on contempt for the committee process, exhibited disdain for
Australian taxpayers and overall reflected poorly on those particular
companies. There can be no doubt that transparency in the reporting of
information relating to tax practices needs to be improved dramatically.
Recent initiatives to improve
The committee notes that successive governments have been working toward
increasing the public disclosure of company's tax information.
Legislative amendments were enacted in 2013 requiring the ATO to
annually publish certain taxpayer information—name, Australian Business Number,
total income, taxable income and tax payable—for large corporate entities with
turnover of greater than $100 million in a financial year. The amendments
were intended to discourage large corporate entities from engaging in
aggressive tax practices and provide more information to inform public debate
about tax policy.
The first report is due to be released in late 2015.
The committee notes that Treasury began a consultation process in June
on an exposure draft to introduce a Bill to exempt private companies from this
but that this proposal has not been supported by evidence provided to the
inquiry. The Uniting Church of Australia, Synod of Victoria and Tasmania
supplementary submission states that:
...a document obtained from the Australian Taxation Office
(ATO) under freedom of information has revealed that the private companies
linked to Australian high wealth individuals have average profit margins lower
than the other categories of companies (foreign owned and Australian publicly
listed) in the group that the legislation applies to. Almost half of
these companies are foreign-headquartered and two-thirds have some form of
international related party dealings. They account for most of all
international related party dealings reported to the ATO, despite being only 21
per cent of the businesses caught under the tax transparency measures of the Tax
Laws Amendment (2013 Measures No. 2) Act. It is possible that the lower
average profit is simply due to this category of companies performing worse on
average than other categories of businesses. However, there is the possibility
that the lower average reported profitability is due to aggressive tax
The committee considers that the relatively basic information which will
be released by the ATO is a good first step to facilitating greater
transparency and public awareness of corporate tax issues. That said, the
turnover threshold could be reviewed after the first report is released with a
view to adopting a lower threshold.
In addition, a public tax transparency code for large corporates was
announced in the 2015–16 Budget. The development of this voluntary corporate
disclosure code is being led by the Board of Taxation. According to the
Treasurer, the Hon. Joe Hockey:
The actions of a few high profile companies, particularly
large multinationals engaging in aggressive tax avoidance, have tarnished the
reputations of companies that are doing the right thing...
The Government would like more companies to publicly disclose
their tax affairs so as to highlight companies that are paying their fair share
and to encourage companies not to engage in tax avoidance.
The government has indicated that it will monitor the development and
adoption of the code and will consider further changes to the law, if required.
The committee recognises that companies may seek to delay the
development and implementation of the public transparency code, or may simply
refuse to comply where it is not in their interests. Rather than spending the
next two years developing a voluntary disclosure code, the committee considers that
the wider community has a right to know about tax affairs of all corporations
operating in Australia.
The committee recommends that a mandatory tax reporting code be
implemented as soon as practicable but no later than the current timeframe for
the proposed voluntary public transparency code. Any Australian corporation or
subsidiary of a multinational corporation with an annual turnover above an
agreed figure would be required to publicly report financial information on
revenue, expenses, tax paid and tax benefits/deductions from specific
government incentives, such as fuel rebates and research and development
The committee recommends maintaining existing tax transparency laws
which apply to both private and public companies.
Increasing disclosure around tax
In response to widespread concerns about the lack of transparency in
disputes, a number of additional proposals to increase transparency were put forward
to the committee. Increasing transparency, it was argued, would enable public
scrutiny and potentially make some corporations consider the potential effect
on their reputation before engaging in tax planning practices.
Some participants urged the committee to adopt mandatory public
reporting of significant tax disputes between the ATO and large corporations.
For example, United Voice highlighted that:
The lifting of privacy protections for corporations once a
tax dispute is large enough to have a significant budgetary impact has the
potential to deter tax avoidance practices. At some point, public interest
concerns must override the privacy of corporate information.
It went on to recommend that an automatic trigger be introduced so that
the ATO was obliged to name companies who are under investigation for tax
minimisation practices where the amount in dispute was in excess of $100
million. Doing so would put the onus back on the companies to satisfy the
community that they were conducting their activities in a manner that was
consistent with community expectations.
Concerns were also raised about the dispute settlement process and the
tendency for disputes to be settled for much less than was originally claimed.
United Voice proposed that:
...the ATO should be required to disclose in a public register
those corporations who have agreed to settlements valued at over $5 million. A
register would allow the public to see which companies had potentially breached
Australian tax laws and to what extent. The disclosure of these corporations
would be another deterrent to aggressive tax practices.
United Voice highlighted that the ATO already publishes Private Binding
Rulings but maintains the anonymity of the companies involved. Even if a
similar approach were applied to the release of information about settlements,
it would still allow for a greater level of transparency and public
understanding about the process.
The committee notes widespread concern in submissions about the lack of
transparency concerning disputes between the ATO and large taxpayers and
considers that improving public transparency is of utmost importance. The
committee also notes that no evidence was presented to the inquiry suggesting
private companies engage in less corporate tax avoidance than publicly-listed
The committee recommends establishing a public register of tax avoidance
settlements reached with the ATO where the value of that settlement is over an
The committee recommends that the government consider publishing
excerpts from the Country-by-Country reports, and suggests that the government
consider implementing Country-by-Country reporting based closely on the European
Informing parliament of
shortcomings in the corporate tax system
The committee considers that the steps taken by both the current and
former governments have the potential to improve transparency and public
awareness about corporate tax. But the committee is concerned that parliament
is not being afforded much of the information necessary to determine whether
the integrity of the corporate tax system is being compromised, to what extent
it is a problem and how it might be best addressed. This point was articulated
by Mr Martin Lock:
Arguably, it is Parliament's business to know how its enacted
laws are working or not working, but despite legislation requiring the
Commissioner to report annually to Parliament 'on the working of this act' his
annual reports are essentially devoid of any information on the tax plans and
schemes corporates and multinationals use to exploit tax laws...
Secrecy over settlements raises very serious accountability
and transparency issues...complete secrecy over settlement is unnecessary,
denying Parliament valuable information it could otherwise use to decide how
effectively its enacted laws are working.
In the interests of enhancing the integrity of the tax system and
maintaining community confidence, the committee considers it appropriate for
the ATO and Treasury to publish an annual report on the aggressive tax
minimisation activities of domestic and multinational corporations.
As part of this process, a robust methodology should be developed to
provide a framework for assessing the size and scope of the problem which could
subsequently be refined as more data and information becomes available.
Initiatives to facilitate greater exchange and transparency of tax
information and data both domestically and internationally have the potential
to enable tax authorities and policy makers to estimate foregone revenue. In
addition, the development and dissemination of such information can bolster
public confidence of the integrity of the corporate tax system and, as a
result, continue to support relatively high rates of voluntary compliance.
The committee recommends that the ATO, in conjunction with Treasury and
other relevant agencies, provide an annual public report on aggressive tax
minimisation and avoidance activities to be tabled in Parliament. This report
could include estimations of forgone revenue, evaluate the effectiveness of
policy and propose potential changes.
Addressing the avoidance of permanent establishment status
The avoidance of permanent establishment (PE) status is specifically
targeted in Action 7 of the BEPS Action Plan. It states that Action 7 is
intended to develop:
...changes to the definition of PE to prevent the artificial
avoidance of PE status in relation to BEPS, including through the use of
commissionaire arrangements and the specific activity exemptions. Work on these
issues will also address related profit attribution issues.
Although permanent establishment and harmful tax practices are action
areas targeted by the BEPS program, some governments have decided that it is an
issue important enough to implement unilateral measures in advance of the final
BEPS actions being revealed.
Diverted profits tax (UK)
The Government of the United Kingdom (UK Government) announced plans in
December 2014 to take unilateral action though the introduction of a
diverted profits tax. According to HM Revenue and Customs, the diverted profit
tax legislation is aimed at:
Large multinational enterprises with business activities in
the UK who enter into contrived arrangements to divert profits from the UK by
avoiding a UK taxable presence and/or by other contrived arrangements between
The main objective of the diverted profits tax is to
counteract contrived arrangements used by large groups (typically multinational
enterprises) that result in the erosion of the UK tax base.
The diverted profits tax will apply if either:
foreign companies are deemed to exploit permanent establishment
companies create tax advantages by using transactions or entities
that lack economic substance.
The legislation was passed in March 2015—just before the tax was due to come
into effect on 1 April 2015.
Rather than raise revenue, Professor Vann submitted that the purpose of
the diverted profits tax was to change the behaviour of multinationals:
The hope in the UK is that the diverted profits tax will
collect exactly nil because Google will set up an office in the UK and pay
ordinary corporate tax. The diverted profits tax is set at 25 per cent. The UK
corporate rate is 20 per cent. The idea is that companies will give up their
tax planning and just bring themselves into the system and pay the ordinary
Associated with the underlying motive to change behaviour, the design of
the diverted profits tax is such that it may not be supported by international
treaties. As a result, corporations that incur the diverted profits tax may not
have rights under tax treaties to seek relief from double taxation, thereby
providing an incentive for companies to structure their tax affairs to be
covered by the mainstream corporate tax system.
While it is too early to evaluate the impact of the diverted profits
tax, there may be lessons for the introduction of a similar tax in Australia,
particularly in designing punitive laws to encourage compliance with the
Ms Rosheen Garnon, KPMG's National Managing Partner Tax, questioned the
efficiency of implementing a unilateral measure designed to push corporations
back into the conventional tax system:
What the UK are doing is they are going through a process of
introducing a brand-new tax, all the administration that goes with that, having
companies work out their compliance with it, only to be pushing people back
into the tax net. To my mind, there is a lot of administration and costs
associated with doing that.
When questioned about unilateral action taken by the UK Government,
Mr Saint-Amans indicated that the OECD had sympathy for the need to move:
...the [UK] government, which has been very instrumental in
supporting the BEPS in raising the profile of this project, wanted to show that
it was acting very, very quickly—even before the timeline of the BEPS project,
which is after a very important electoral date in the UK...
We tend to think that unilateral measures will be better
after we have completed the action plan...
Even though a diverted profits tax was raised as a possibility for
Australia following the G20 Leaders Meeting in December 2014, the committee
notes that the government has decided not to introduce such a tax.
Strengthening anti-avoidance rules
Although strongly supporting measures agreed to as part of the OECD's
BEPS program, the Australian Government has taken a different approach to the
UK and opted to strengthen the existing anti-avoidance rules. In the 2015–16
Budget Speech, the Treasurer announced his intention to introduce a
multinational anti-avoidance law to stop multinationals artificially avoiding a
taxable presence in Australia and to force them to pay tax in Australia on
profits from economic activities undertaken in Australia.
Proposed changes to Part IVA of the Income Tax Assessment Act 1936
were announced in the House of Representatives immediately following the
2015–16 Budget speech and, if enacted, would take effect from 1 January
An exposure draft of the proposed legislative amendments has been
released and submissions called for by 9 June 2015. Twenty submissions were
received, of which three are confidential.
The proposed amendments seek to extend the general anti-avoidance rule
in Part IVA of the existing legislation to negate certain tax avoidance schemes
used by large multinational corporations to shift profits to low or no tax
jurisdictions. The measure will only apply to 'global groups' that have an
annual global revenue that exceeds A$1 billion in the year in which they operated
the scheme and where the no or low tax jurisdiction condition is satisfied.
It is anticipated that, if enacted, the measure would capture
approximately 30 large multinational companies that the ATO suspects of
diverting profit using artificial structures to avoid a taxable presence in
Under the proposed legislation, where a tax avoidance scheme is found to
be captured by the measure, the Commissioner of Taxation has the power to apply
the tax rules as if the non-resident entity has been making a supply through an
Australian permanent establishment.
Where a corporation is found to have a scheme that is captured by the measure,
penalties of up to 100 per cent of the tax owed plus interest may also be
applied in addition to the tax owed.
The committee notes that the potential revenue benefits from this
measure were not quantified in the Budget papers.
When questioned about this at the budget estimates hearing, Minister Cormann
The reason there is no revenue estimate is that it is very
difficult to quantify the likely revenue collected, and the government has
decided to take a conservative approach.
It may be that, as with the diverted profits tax in the UK, the
intention of the multinational anti-avoidance law is to encourage large
multinationals to change their behaviour and structure their activities so that
profits from Australian activities are brought into the mainstream tax system
and are taxed at the company tax rate. If such a behavioural change occurs, the
revenue benefits may not accrue to this measure but broader company tax
This intention to change behaviour was confirmed by Mr Olesen, Second
Commissioner of the ATO, at the budget estimates hearing in June:
The other thing to look out for when there are amendments to
Part IVA is how taxpayers change their behaviour. The best outcome from
anti-avoidance provisions is that you never apply them because the entities at
which they are targeted change their set-ups and structures in ways that mean
they are not subject to those provisions. So exactly what the outcomes might be
in the long haul will depend a lot on how entities respond to those new
As described by Mr Heferen, the mark of success should be measured by
At the end of the day what will be a mark of success will be
the behavioural change from firms as opposed to the ATO actually utilising the
new power. Often the success is not in applying the anti-avoidance provisions;
the success comes in firms who would otherwise be the target of the
anti-avoidance provisions who change their behaviour to pay tax in Australia so
it is not triggered. And given the small number of companies that would be
effected here we should be able to see that, hopefully, in a relatively short
period of time after enactment.
The proposed legislation, due to be introduced to the Parliament in the
Spring Session, will provide the committee with the opportunity to look more
closely at the provisions. As such, the committee considers that the bill, when
introduced, will be explored in the final report.
Competitive disadvantages arising from inconsistent application of tax laws
The provision of goods and services from overseas jurisdictions raises
concerns on both competition and taxation grounds.
Competition issues arise where an advantage is gained by some foreign
and multinational companies that provide services to Australians from outside
Australia. As such, domestic corporations can be disadvantaged because foreign
companies are not subject to the same tax regime (not just income tax but also
GST, payroll tax, et cetera). According to Mr Heferen from the Australian
...if people are operating off a different cost base, and that
is tax driven...then prima facie that is a concern.
The concerns raised by stakeholders generally fell into two
categories—those related to the differences in the level of corporate tax paid
on profits, and those related to the levying of GST.
Not only can foreign firms gain a competitive advantage but these
actions also have the potential to reduce Australian tax revenue when they
avoid permanent establishment and do not contribute to the tax base in the same
way as an Australian domiciled company.
Lower rates of corporate tax
The committee also received submissions highlighting the fact that
foreign companies could bid for government and non-government contracts at
lower rates than Australian companies because of differences in corporate tax
While this may not be a concern for corporations that have to act in the
best interests of shareholders, it may provide government agencies with an
opportunity to show leadership and even the playing field. For example,
Macquarie Telecom voiced concerns about technology contracts and sought to
neutralise the competitive disadvantage it faces as an Australian taxpayer:
...we face a perverse situation where the Government, while
increasingly concerned on behalf of taxpayers at the avoidance of tax by
international technology giants, is in fact providing taxpayers' money to these
same companies under these same questionable arrangements...
It noted that the committee has discussed how consumers in the UK
exercised their collective power against Starbucks by boycotting and occupying
Starbucks stores until that business changed its conduct.
According to Macquarie Telecom:
...the Government (and concerned businesses) can similarly
exercise their buying choices in a way that discourages arrangements that
artificially avoid the establishment of a permanent entity in Australia for tax
Macquarie Telecom went on to propose to the committee that government
agencies should use their purchasing leverage and discretion to discourage the
avoidance of Australian company tax. Squiz, an Australian owned and based
technology company, noted that:
As an Australian taxpayer, we
operate on an uneven playing field when competing with overseas businesses who
have arranged themselves to artificially avoid establishing contracting
entities in Australia.
Squiz supported the proposal put forward by Macquarie Telecom in
principle and believed that it would signal the seriousness with which
Australia views the issues of tax avoidance.
Levying of GST
Various stakeholders outlined concerns that GST was not being charged by
some companies on goods and services purchased through the internet. For
example, Mr Julian Clarke, Chief Executive Officer of News Corp Australia,
outlined his concerns about the need for a consistent application of GST in
relation to video on demand services and advertising services:
The playing field is not level when two of the companies,
ours [Presto] and the other joint venture [Stan], have to apply the GST to the
selling price, whereas a company [Netflix] can walk in from overseas and not
If the GST were applied to them as it is to us, there would
be a level playing field. If they choose to have a price cheaper than us given
they are paying all the costs, then that is a different decision, but clearly
they are not. They have an advantage that is unfair.
The committee is also aware that some companies sell advertising in
Australia but invoice from a foreign jurisdictions and, as such, are not
required to charge GST. For example, a small business owner wrote to the
committee to highlight that Facebook invoices Australian companies from Ireland
and does not charge GST.
In the 2015–16 Budget, the Australian Government announced that GST will
be extended to cross border supplies of digital products and services imported
by consumers from 1 July 2017. According to the Budget Papers:
This measure will result in Australia being an early adopter
of guidelines for business-to-consumer supplies of digital products and
services being developed by the Organisation for Economic Cooperation and
Development (OECD) as part of the OECD/G20 base erosion and profit shifting
This approach is consistent with that taken by a number of other
countries, including Japan, Norway, South Africa, South Korea, Switzerland and
member countries of the European Union.
As this is a GST measure, it will require agreement from the states and
territories prior to its implementation, and all revenue raised from the
measure will be transferred to the states and territories.
The committee supports efforts to remove disadvantages for Australian
companies when competing with foreign-based entities that arise because of
differences in taxation between jurisdictions.
The proposed action of the Australian Government to close GST loopholes
is a first step to improving the integrity of the tax system by levelling the
playing field. However, the committee considers that more could be done to
ensure that domestic companies are not disadvantaged and that taxes on profits
earnt from Australian sources are paid in Australia.
As a role model for the community, the committee considers that the
Australian Government should evaluate tenders for the goods and services it
procures using a comparable tax benchmark and not disadvantage Australian
companies that have higher tax burdens than competitors from other
The committee recommends that the Australian Government tender process
require all companies to state their country of domicile for tax purposes.
The committee recommends mandatory notification by agencies to the
relevant portfolio Minister when contracts with a dollar value above an agreed
threshold are awarded to companies domiciled offshore for tax purposes.
Navigation: Previous Page | Contents | Next Page