Business Financials

Corporate giants hit with $2.2 bn Australia tax bill

Corporate giants hit with $2.2 bn Australia tax bill

Australia on Thursday said it had slapped seven large multinationals with a multi-billion-dollar tax bill as it pursued global firms shifting profits offshore to minimise liabilities.

The companies hit with the Aus$2.9 billion (US$2.2 billion) bill were not named although miner Rio Tinto said late Wednesday it was required by the Australian Tax Office (ATO) to pay additional tax of Aus$447 million including interest.

The government said four of the firms were involved in e-commerce and three in the energy and resource sectors. Companies including Apple, Google and BHP Billiton were grilled at parliamentary hearings on their tax structures in 2015.

“Our multinational tax laws are having an impact and we now have one of the toughest, if not the toughest, anti-avoidance tax regimes in the world,” Treasurer Scott Morrison said in a statement.

“Multinational companies are being put on notice.”

Canberra has vowed to crack down on tax avoidance by multinationals, introducing new laws that included stronger protections for whistleblowers and harsher penalties for failure to meet compliance or disclosure requirements.

The ATO was currently carrying out 71 audits in 59 global firms, with some 1,000 officers part of a taskforce investigating companies’ tax arrangements, the government said.

It expects some of the seven companies issued with tax bills to settle their accounts, while others were likely to take the claims to court.

Rio said it would challenge the amended tax assessments, which relate to the pricing of transactions between the firm’s entities in Australia and its marketing hub in Singapore, “but will pay 50 percent of the total amount to the ATO this month”.

“The amended assessments do not relate to any tax avoidance schemes as confirmed by the Australian Tax Office. No penalties are payable,” the Anglo-Australian firm added in a statement.

“Rio Tinto considers that its pricing is in accordance with the internationally recognised OECD (Organisation for Economic Co-operation and Development) guidelines and Australian domestic law.”

–AFP