Shining a light in dark places – Senate Committee recommendations to address corporate tax avoidance welcomed

17 August 2015

The Tax Justice Network Australia (TJN-Aus) has welcomed the recommendations of the interim report of the Senate Economics Committee inquiry into corporate tax avoidance. UnitingJustice Australia is a member organisation of the Tax Justice Network.

“The Committee has made welcome recommendations to greatly increase transparency around the tax paying behaviour of multinational corporations”, said Dr Mark Zirnsak, spokesperson for the TJN-Aus. “Transparency is one of the best deterrents to corporate tax dodging.”

“The Senators on the Committee have clearly been persuaded that too many companies are getting away with dodging the taxes they should be paying in Australia”, Dr Zirnsak said. “The Senators are to be commended for the work they have done in bringing to light the extent and depth of corporate tax avoidance in Australia.”

The Committee has reported that:
• “the tax incentives afforded by overseas jurisdictions to some multinational companies are facilitating aggressive tax minimisation and erosion of Australia’s tax base”;
• artificially loading up Australian subsidiaries with debt from loans by an overseas part of the company is being used to cheat Australia out of tax revenue; and
• some companies activity avoided giving straight answers to the Senators, “this reluctance verged on contempt for the committee process” and “exhibited distain for Australian taxpayers”.

“We call on the Treasurer to not delay in implementing the recommendations of the Committee”, Dr Zirnsak said.

However TJN-Aus would have liked to see the Committee go further in its recommendations.

“We would have like to see the Committee strongly recommend that the reports that multinational companies will have to provide on their sales, profits and taxes paid broken down by each country they are operating in be made public”, said Dr Zirnsak. At the moment these reports will only be provided in private to the Australian Taxation Office.

“We also wanted the Committee to go further and call for the Government to create a register of company ownership, to end the ability of corporations to set up front companies for the purposes of dodging tax”, Dr Zirnsak said. “The Committee should have also required companies to have to publicly reveal all their subsidiaries to remove the loophole where companies choose to avoid disclosing subsidiaries in secrecy jurisdictions”.

“We hope the Committee will go further with its recommendations in its final report”, Dr Zirnsak said. “We hope the Committee will recommend protection and rewards for whistleblowers who expose corporate tax evasion and avoidance and recommend that Australia adopt laws similar to those successfully used in the UK to require companies and their tax advisers to disclose to the tax authority any potentially dodgy tax avoidance scheme they are proposing to use.”

For more details on the Tax Justice Network Australia go to