Australia, UK to “go further and faster” on multinationals’ profit-shifting

Treasurer Joe Hockey

Australia and the United Kingdom will coordinate their efforts to crack down on multinationals which are accused of shifting their profits to low-tax countries and paying less tax in the countries where they make the profit.

“Australia and the United Kingdom will work together to drive the global agenda going after multinationals that are shifting profits away from the countries where they earn the income,” Australian Treasurer Joe Hockey told the ABC Insiders program on Sunday.

According to him, in addition to the current efforts with the OECD, Australia and the UK want “to go further and faster” on the issue to make sure the multinationals pay their fair share of tax.

Australia’s Senate inquiry into corporate tax evasion early April found that nearly all sales made by major multinationals – Apple, Google and Microsoft – are taxed in Singapore at almost half of Australia’s existing 30% tax rate.

The Australian Taxation Office’s report to the inquiry indicated that out of Australia’s $600 billion total trade, $388.4 billion was shifted overseas by multinationals to their offshore companies for tax minimization.

The multinationals reject any wrongdoing, saying their current tax payment complies with Australian law.