ATO Close In On CE + Appliance Companies, Tipped To Collect Millions In Back Taxes
First tipped by ChannelNews in 2014 we have been told that at least six major consumer electronics Companies are being investigated similar to what happened to Sony who was forced to pay $32M in back taxes and penalties.
See original story here: http://www.channelnews.com.au/sales_and_marketing/ebusiness/34SH46JP-ato-turns-blowtorch-on-tech-companies-in-fixed-transfer-pricing-probe.aspx
Commissioner Chris Jordan has confirmed that 40 multinationals technology Companies are under investigation, they include an Asian PC Company and a Japanese Company who operate across several segments of the market. Also under investigation is a major Korean Company and several software Companies.
Jordan said companies such as Apple and Google would no longer be able to minimise or pay no tax on profits gained in Australia according to an Australian IT report.
He said large tech companies were particularly culpable for attempts at tax avoidance and minimisation because they felt they had no obligation to pay tax in Australia.
“With the tech companies, it’s the gravity and magnitude of what they are doing. They are basically saying, ‘well, none of our profit, more or less, is subject to tax in your country’,” Jordan told The Australian.
“Logically this shouldn’t be. Clearly they have a lot of economic activity here. Customers are here, people they are trying to sell to be here, they have people selling to customers here. The whole delivery of the service digitally is made here.
“There will always be a bit of planning on the margin and that’s business … but these people have taken the whole lot off the table. They’re not just satisfied with a little bit, they’re taking the lot.”
Jordan said that, as a result of recent surveillance of multinationals’ tax arrangements, the Tax Office is conducting 40 audits, 12 of them into some of the world’s largest tech companies.
Apple’s tax arrangements, which allow billions in revenue to be moved to an Irish affiliate under a legal tax structure, have been the subject of criticism in the US and Europe. Last year, Apple only paid $80.3 million in tax in Australia despite generating revenue of about $6 billion.
In recent submissions to an upcoming Senate inquiry on corporate tax avoidance and minimisation, Google and Apple defended the amount of tax they paid to the ATO. The two reckon they have paid their fair share of tax and the tech sector had been unfairly singled out.
Jordan said tech companies in particular have engendered a culture of non-compliance and non-transparency that resulted in Australia being denied “hundreds of millions” in tax revenue each year.
“It’s the gravity of the issue, and the sheer size of it and the profile of it. It really does work against good compliance. Because people generally comply if they think everyone else is,” Jordan said.