Footnotes

Chapter 1 - Background to the inquiry

[1]        Journals of the Senate, No. 59, 2 October 2014, p. 1588.

[2]        Journals of the Senate, No. 95, 15 June 2015, p. 2644; Journals of the Senate, No. 105, 12 August 2015, p. 2921; Journals of the Senate, No. 126, 23 November 2015, p. 3419; and, Journals of the Senate, No. 138, 22 February 2016, p. 3749.

[3]        Journals of the Senate, No. 59, 2 October 2014, p. 1588.

[4]        ATO media centre, 'ATO statement regarding release of taxpayer data', 4 April 2016, https://www.ato.gov.au/Media-centre/Media-releases/ATO-statement-regarding-release-of-taxpayer-data/ (accessed 12 April 2016).

[5]        Submission 48, p. 12.

[6]        ATO Media Centre, 'Tax Office chasing up advisers who facilitate offshore tax evasion', https://www.ato.gov.au/media-centre/media-releases/tax-office-chasing-up-advisers-who-facilitate-offshore-tax-evasion/ (accessed 15 April 2016).

[7]        ATO Media Centre, 'Tax Office chasing up advisers who facilitate offshore tax evasion', https://www.ato.gov.au/media-centre/media-releases/tax-office-chasing-up-advisers-who-facilitate-offshore-tax-evasion/ (accessed 15 April 2016).

Chapter 2 - A persistent problem

[1]        The committee understands that corporate tax is levied on profits not revenue but the fact that these companies are allowed to book profits margins that are so low is a concern to the committee and the community more broadly.

[2]        Mr Tony King, Committee Hansard, 8 April 2015, p. 46.

[3]        Committee Hansard, 1 July 2015, pp. 32‑33.

[4]        Committee Hansard, 2 July 2016, pp. 8‑9.

[5]        Submission 22, p. 2.

[6]        Committee Hansard, 8 April 2015, p. 47.

[7]        Committee Hansard, 18 November 2016, p. 57.

[8]        Ms Kris Peach, Australian Accounting Standards Board, Committee Hansard, 18 November 2016, p. 61.

[9]        Ms Kris Peach, Australian Accounting Standards Board, Committee Hansard, 18 November 2016, p. 61.

[10]      Ms Kris Peach, Australian Accounting Standards Board, Committee Hansard, 18 November 2016, p. 62.

[11]      The two main approaches to transfer pricing are traditional transaction methods and transactional profit methods. Traditional transaction methods—the comparable uncontrolled price (CUP) method, the resale price method and the cost plus method—are regarded as the most direct means of establishing whether commercial and financial relations between associated entities are arm's length. Transactional profit methods—the transactional net margin method and the transactional profit split method—may be the most appropriate method in certain circumstances. Such circumstances include where entities have highly integrated activities, where there is no or limited publicly available gross margin information on third parties, or where each of the parties makes valuable and unique contributions in relation to a controlled transaction. OECD, OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrators, July 2010, pp. 59–60.

[12]      Commissioner of Taxation, Committee Hansard, 1 July 2015, p. 48.

[13]      For example, the taxable income for Apple Australia represented between 2.5 and 4.5 per cent of revenue sourced from Australia between 2010 and 2015. Similarly, in the pharmaceutical industry, earnings before interest and tax (EBIT) ratios of between 4 and 8 per cent are considered appropriate by the ATO for a subsidiary only undertaking distribution activities. Apple Australia, Answer to Question on Notice No. 17, 28 April 2015, pp. 1‑2; Commissioner of Taxation, Committee Hansard, 1 July 2015, p. 48.

[14]      Committee Hansard, 1 July 2015, p. 32.

[15]      Committee Hansard, 1 July 2015, p. 17.

[16]      Committee Hansard, 1 July 2015, p. 15.

[17]      Committee Hansard, 1 July 2015, p. 16.

[18]      Committee Hansard, 1 July 2015, p. 16.

[19]      Committee Hansard, 8 April 2015, pp. 48.

[20]      Committee Hansard, 8 April 2015, pp. 47–48.

[21]      Mr Chris Jordan, Committee Hansard, 1 July 2015, p. 48.

[22]      Mr Chris Jordan, Committee Hansard, 1 July 2015, p. 48.

[23]      Mr Chris Jordan, Committee Hansard, 1 July 2015, p. 48.

[24]      Commissioner of Taxation, Committee Hansard, Additional Estimates, 10 February 2016, p. 66.

[25]      Committee Hansard, Additional Estimates, 10 February 2016, p. 69.

[26]      Committee Hansard, Additional Estimates, 10 February 2016, p. 66.

[27]      Committee Hansard, Additional Estimates, 10 February 2016, p. 70.

[28]      Committee Hansard, Additional Estimates, 10 February 2016, p. 73.

[29]      Committee Hansard, Additional Estimates, 10 February 2016, p. 73.

[30]      Commissioner of Taxation, Committee Hansard, Additional Estimates, 10 February 2016, p. 73.

[31]      Committee Hansard, Additional Estimates, 10 February 2016, p. 74.

Chapter 3 - Maintaining the pressure

[1]        Senate Economics Legislation Committee, 2015‑16 Additional Estimates, 10 February 2016, p. 69.

[2]        Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015, Explanatory Memorandum, p. 7.

[3]        Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015, Explanatory Memorandum, p. 8.

[4]        Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015, Explanatory Memorandum, p. 11.

[5]        Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015, Explanatory Memorandum, p. 54.

[6]        Senate Economics Legislation Committee, Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015 [Provisions], 9 November 2015, p. 17.

[7]        Committee Hansard, 10 April 2015, pp. 74–76.

Additional Comments from the Australian Greens

[1] http://greens.org.au/sites/greens.org.au/files/Tax%20Avoidance%20Package.pdf

[2] See: Recommendation 6, Australian Greens’ Additional Comments, Economics References Committee First Report on Corporate Tax Avoidance