Companies have every right to minimise their own tax burdens, but shrinking your footprint only lasts so long before someone gets annoyed. For Apple Australia and Google Australia, that time might be nigh as the Australian Taxation Office (ATO) reportedly gears up to investigate the pair for tax minimisation.
The ABC reports that the pair — who have been accused of diverting their revenue offshore to avoid huge tax bills — are on a list of companies currently under investigation.
There's currently a four-year program underway inside the tax office to target international profit shifting, but the tax office won't confirm whether or not Apple and Google are on the list.
Here's what Deputy Taxation Commissioner, Mark Konza, said in a statement:
As part of our compliance work we have an International Structuring and Profit Shifting (ISAPS) program. Under this four year program we are focusing on a large number of companies that have undertaken international restructures. This work is supported by additional funding from the Government in this year’s budget. As a first step, the ATO has undertaken an extensive case selection process applying a risk filtering process to the 2012 business tax return’s Internationals Dealing Schedule (IDS) to identify cases where the risk might present itself. This has been complemented with qualitative screening to go from 233 candidate cases to arrive at 86 cases where it is considered highly likely that the risk will be present and on which we will be focusing progressively.
With these 86 cases, we will review structures and arrangements to see if they represent an inappropriate shifting of profits outside of Australia. These reviews are either already underway or are expected to commence in the coming months and supplement our existing international work. Where issues are identified from the reviews, we would conduct an audit of those arrangements to check the validity of those concerns and establish whether they are appropriately paying tax in accordance with Australian laws.
The government is also looking at ways of closing the tax loopholes as part of a global meeting of Treasurers and Finance Ministers. [ABC]