Back in July, ABC’s The Business and Michael West featured an extraordinary raft of allegations from a 32-year veteran industry insider turned whistleblower, George Rozvany, who claimed that multinational tax avoidance was “out of control” and cost the Budget up to $50 billion dollars a year in lost revenue.
Rozvany claimed the Big Four accounting firms – PwC, Deloitte, KPMG and Ernst & Young – were the key masterminds behind the tax dodging. He also cited sham transfer pricing arrangements as a key avenue by which multinational tax avoidance takes place.
Finally the Australian Tax Office (ATO) is pushing back, warning the Big Four accounting firms against facilitating structures that circumvent the Multinational Anti-Avoidance Law (MAAL), also known as the “Google Tax”, which came into effect in January. From The AFR:
“We only became aware of this new scheme two weeks ago,” Deputy Commissioner Mark Konza said…
Mr Konza said he had been at a presentation by a major accounting firm, with a client present, of a scheme to redirect Australian sales through a partnership where only 1 per cent of profits went to the Australian partner and the rest went to a company in a low-tax jurisdiction.
In effect the MAAL would be completely sidestepped and it was business as usual, he said…
“Some firms are saying, ‘We’ve got the MAAL inoculation, come to us,'” Mr Konza said.
The only way to stamp out such behaviour is to issue large financial penalties to those promoting and facilitating such structures.
