The government will work on tackling massive loopholes in international taxation law later this year, following a massive annual revenue figure reported by Apple Australia.
Updated: Apple Australia has disputed the income tax paid figure offered in the original report we have linked to and re-reported. It stated that $36 million is not the final tax bill. Rather it is an income tax expense rather than the final income tax bill itself. It won’t confirm the final amount paid to the tax office to us. We apologise for the error and any confusion.
The Treasurer’s office told us this morning that it will pick up the work of the previous government in spirit and attempt to close the gate so to speak on these international tax loopholes.
The G20 Finance Ministers meeting set to be hosted in Australia later on in the year, and a key focus according to the Government is looking at how global companies can be compelled to pay their fair share of tax in countries where they operate.
The former Rudd/Gillard Labor governments had focussed on the need for better transfer pricing legislation, with Member for Chifley, Ed Husic, doggedly pursuing the agenda. Transfer pricing refers to companies transferring their earnings as costs between countries. It’s often used as a mechanism to minimise the impact of country-specific tax.
Apple has been a particular focus for Husic in the past around tax legislation and the so-called Australia Tax, saying last year that the task of holding these companies to account is tough, considering the local management often dodges scrutiny by government or the public.
Husic told us today that the government needs to “get serious” with these companies, as honest taxpayers and businesses continue to shoulder the bill for their inaction:
It’s blindingly obvious our “horse and cart” tax system can’t keep up with technological change.
What’s also galling to see is that many of these companies gladly take a lower tax bill but still slug us with higher prices for hardware and software.
The former Labor government flagged the need to work with the G20 to reform tax systems across the globe, with a special focus on transfer pricing.
While tech companies are observing the rules in place now, other companies paying their fair share feel they are carrying a more of a burden.
The Abbott Government has to get serious about tackling this issue within the international community – or risk seeing our revenue base continue to shrink.
We’ll have to wait for the G20 meeting to see if anything can be done about these low tax bills, but as with all legislative amendments, it’s slow going. [AFR]