DAVID KOCH:
Tech giants Apple, Google and Facebook have faced a Senate inquiry into how much tax they actually pay in Australia. The companies were asked to justify why they send 98 per cent of their profits offshore to lower taxing countries, declaring only a fraction here in Australia.
CUTAWAY:
The margin in Australia is two per cent and globally it’s 45 per cent?
That’s correct.
DAVID KOCH:
According to the companies’ filings with corporate watchdog ASIC, last year Facebook paid just $3 million tax on profits made here, Google, $16 million and Apple, $128 million. That’s an effective tax rate of between one per cent and 1.7 per cent. Good if you can get it. The big four banks on the other hand paid between $2.5 and $3.6 billion in tax at rates of up to 15.2 per cent. The Government says its crackdown on multinational tax avoidance has snared an extra $4 billion in the last year. Sounds a lot but is it enough? Assistant Treasurer and Revenue and Financial Services Minister Kelly O’Dwyer joins me now. Minister, it sort of seems clear these companies are not paying their fair share of tax in Australia. What is the Government doing to hold them to account?
KELLY O’DWYER:
Hi Kochie. We absolutely believe very strongly that you cannot choose how much tax you pay here and that absolutely goes for big multinational companies. There have been a number of loopholes that have existed under the previous Labor government and this government has been shutting them down. We have passed a number of laws that crackdown on these companies that ensure that they actually pay the right amount of tax. As you’ve said, $4 billion in the last financial year alone, we have been able to claw back in terms of the assessments raised and around about $3 billion of that has come from just seven multinational companies alone.
DAVID KOCH:
That sounds a lot, but still not nearly enough, is it? There’s got to be a lot more than that? It could be, it’s up to $100 billion?
KELLY O’DWYER:
Indeed, and the Government is doing even more. The Government has recently passed the Diverted Profits Tax, there are a number of audits and assessments that are going on, which will mean that these companies, these big technology companies that have a minimal presence here in Australia, but are making sales in Australia, will have to pay significant amounts of tax. We have got over 1000 audits that are being conducted already, a number of these companies have admitted that they have had to restructure their affairs in order to pay back taxes to the government. And going forward, as a result of the Chevron case that was actually handed down last week, there will be $10 billion that we will see flow from that.
DAVID KOCH:
So give me your prediction because you introduced these multinational anti-avoidance legislation, and because of that, Facebook declared Australian revenue increased tenfold just in the following year. So you would think that before the legislation was introduced, they were rorting the system and we should be going back and having a look at it?
KELLY O’DWYER:
Well we are going back and having a look at it. I mean I won’t specifically comment on specific taxpayers. The Australian Taxation Office has been conducting audits. They have actually put individuals, there are more than 1000 of these officers that have actually been put into some of these very big companies, going through their books and they are paying back taxes as a result of these laws.
DAVID KOCH:
Give us a stab at what you think in total you will be able to get out of all these companies. Are we talking $500 million? Are we talking $1 billion?
KELLY O’DWYER:
We’re talking billions and billions of dollars here. This is very, very significant.
DAVID KOCH:
And you’re confident you’re going to get it?
KELLY O’DWYER:
We’re very confident because we’ve closed down Labor’s loopholes. We’ve put in place the Multinational Anti-Avoidance Law, we have tightened thin capitalisation, we have ensured we have got country by country reporting for the first time and we have put in place the Diverted Profits Tax.
DAVID KOCH:
That’s fantastic. Go get them! Bring the Budget back into surplus, that’s one easy way. Kelly O’Dwyer, thanks for joining us.
KELLY O’DWYER:
Thank you.