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 Under the proposals, released as part of Australia's 2015/16 federal
budget, companies with more than A$1 billion in global revenues that
are found to have intentionally avoided paying tax in Australia
could be pursued for lost taxes.
With the new measures Australia will join Britain in leading a
crackdown on companies such as global tech giants.
Apple <AAPL.O> and Microsoft, focusing particularly on their alleged
shifting of profits from high-tax countries to low or no tax
regimes.
"We have identified 30 large multinational companies that may have
diverted profits away from Australia to avoid paying their fair
share of tax in Australia," Treasurer Joe Hockey told parliament.
"Under this new law, when we catch companies cheating, they will
have to pay back double what they owe, plus interest."
Under Australia's leadership last year, the Group of 20 leading
economies (G20) endorsed a set of common standards of sharing bank
account information across borders with automatic exchange of
information among its members.
The Australian units of Google, Apple and Microsoft revealed earlier
this year they were "under review" by the Australian Tax Office (ATO),
which had declined to renew agreements with the companies on
transfer pricing.
That accounting practice, under which a company sets internal prices
for goods to its subsidiaries, has been blamed for helping large
companies minimize their tax bills by raising the cost of those
goods to subsidiaries in high-tax regimes.
Pressure from the United States and the consensus nature of the OECD
have made tackling this issue extremely difficult, said Antony Ting,
an associate professor of economics at Sydney University.
"I think if Australia really wants to protect its tax base, we
really need to think about something like a Google Tax or this kind
of unilateral action," he told Reuters, using the colloquial term
coined for Britain's proposed diverted profits tax.
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Apple's revenues in Australia grew from around A$3.5 billion in 2010
to A$6.1 billion in 2013, while its taxable income went from A$166
million to A$240 million during the same period.
And while Australia does not represent these companies' largest
market, it is a significant and influential one.
Still, unilateral action is not without risks.
"It's unwise and ill-advised and irrational to depart from current
approaches and agreements expressed in OECD rules," George Barker,
an expert on taxation law and economics at the Australian National
University's Center for Law and Economics, told Reuters.
(This story has been refiled to correct "raising" instead of
"lowering" in eighth paragraph)
(Additional reporting by Swati Pandey in SYDNEY and Lincoln Feast in
CANBERRA; Editing by Simon Cameron-Moore)
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