Among the Companies targeted in the past are Sony, HP, Microsoft, Cisco Acer and Dell.
Some of the targeted Companies which include two major networking Companies are seriously looking at whether they operate as a subsidiary in Australia or whether they move to a distributor model.
Several PC and appliance Companies are among those that the ATO is looking to get into Courts by the end of 2015.
The ATO said that they have a target $1.1 billion in revenue from multinationals by 2017, and that they expect to recover much of it by the end of the year through audits of technology companies such as Apple, and Google.
Also in their sights is Netflix and several music streaming Companies who are stripping revenues out of Australia direct into tax havens, Netflix is also failing to collect a GST tax?
In an interview with Fairfax Media, ahead of the federal inquiry into corporate tax avoidance next week, Mr Jordan said the ATO had already raised $250 million in liabilities through audits of multinationals, but that this amount did not include 12 technology companies that were also under audit and viewed as the “most aggressive”, he expected this number to significantly rise before the end of the year.
Mr Jordan said that the ATO was currently working with overseas jurisdictions to take a detailed look at where e-commerce companies were earning profits
“Ultimately the best long-term solution is to have a clear set of international rules. It’s up to the government if they want to do anything in the shorter term.”
Treasurer Joe Hockey this week said the government could proceed with a UK-style “Google tax” whereby profits are taxed at higher rates.
The UK’s diverted profits tax proposes to tax companies’ profits they declare overseas, but which come from local activity, at 25 per cent. This is higher than the UK’s 21 per cent headline company tax rate.
The OECD meanwhile is working on a plan to stop companies such as Apple, Google and Microsoft from shifting profits to low-tax or no-tax jurisdictions.
Mr Jordan said while companies were using tax experts to help in minimising their tax, the Tax Office was often challenging their “artificial and contrived” tax structures.
This was being done through their program targeting multinationals, known as “international structuring and profit-shifting” (ISAPS), but also through greater collaboration and information sharing with six tax authorities that could not be named.
As of June 30 the ATO will have conducted about 200 reviews and 41 audits, including the 12 technology companies, under ISAPS.
“There’s some big dollars in those tech companies – we think we will exceed the $1.1 billion,” Mr Jordan said. “Obviously there’s a lot of resistance here and they’re [the companies] are not being as quick as we’d like in providing the information … so we’re [making] formal demands for information.”
Mr Jordan said while most of the cases would be finalised by year’s end, some of the companies hit with tax bills could dispute the assessments, which would drag out the time frame, and the time it takes to clock the revenue.
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