Microsoft, McDonald's, IBM not signed up to government's tax transparency code

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This was published 6 years ago

Microsoft, McDonald's, IBM not signed up to government's tax transparency code

By Nassim Khadem
Updated

Microsoft, McDonald's and IBM are among dozens of multinational giants that have not signed up to the federal government's tax transparency measures aimed at giving the public more details about company tax affairs.

Introduced in the 2015 federal budget, the Tax Transparency Code, then-treasurer Joe Hockey said, was for "companies, particularly large multinationals operating in Australia, to publicly disclose their tax affairs".

McDonald’s is among several multinationals that have not signed up to the tax transparency code.

McDonald’s is among several multinationals that have not signed up to the tax transparency code.Credit: Andrey Rudakov

Businesses with turnover of between $100 million and $500 million will be required to give only general tax details and/or commentary on their tax position, but those with over $500 million revenue will have to give more detailed information.

Big business lobby groups including the Business Council of Australia and Corporate Tax Association want their paying members to sign up to the code. The BCA has said it's better companies volunteer information in order to avoid "a prescriptive approach".

Board of Tax chairman Michael Andrew would not publicly name companies that had not signed up, but said that European-based multinationals were generally more compliant with the code, as they were facing similar measures in their home nations that were designed to increase transparency about their tax affairs.

But US-based multinationals, he said, had expressed that they were more focused on their global tax strategies, especially in light of US President Donald Trump's planned tax reform.

President Trump wants some of the $US2.5 trillion ($3.3 trillion) profits that Fortune 500 companies hold offshore to be brought back to the US. To do this, he proposed giving them a special one-off 10 per cent rate on their offshore earnings rather than taxing them at the full 35 per cent US corporate tax rate.

"They [US multinationals] are distracted," Mr Andrew told Fairfax Media. "The Trump tax package is the biggest priority for them at the moment."

Mr Andrew said he hoped all companies would come to the table and voluntarily sign up, otherwise they would be legally forced to. The 2015 budget papers had suggested that if companies fail to sign up voluntarily, the code may become mandatory.

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Fairfax Media understands a long list of private and public companies are failing to play ball. These include Microsoft, which former BCA boss Jennifer Westacott had said would come on board. It hasn't. Microsoft is busy fighting the Australian Taxation Office on millions of dollars worth of tax bills. It is one of 71 multinationals under ATO audit.

Others yet to sign up to the code include fast food giant McDonald's Australia, which routinely attributes profits to lower-tax jurisdictions. It cut its tax bill by more than half in 2015 by routing payments via the low-tax nation of Singapore.

IBM, which has previously stated it's been under ATO audit over its tax affairs, is another company dragging its feet.

Credit Suisse, which has been the subject of an international tax investigation that includes Australian authorities, has also not signed up. On Friday Revenue and Financial Services Minister Kelly O'Dwyer revealed that 346 Australians had been identified in the leak of Credit Suisse documents, which the Dutch tax authority obtained from a whistleblower last April. Then on Monday the ATO confirmed it had obtained details of more than 1000 of the bank's accounts linked to local clients.

Fairfax Media understands that other public companies that have not signed up to the tax transparency code include Alcoa, Amcor, Exxon Mobil, HSBC, IAG, Mitsui, Navitas, News Corp, Optus and Virgin. Private companies not yet signed up to the code include Linfox.

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