Taxing times for multinationals, good for governments
Dr Elfriede Sangkuhl, from the UWS School of Law, worked at Ernst and Young before completing her PhD on the equitable taxation of multinational corporations, which explored the possibility of consolidating profits and taxing them according to the actual sale, assets and size of employee payroll of the relevant taxing jurisdiction.
“I believe taxpayers in Australia would be hugely offended to know how blatantly multinational corporations reduce the amount of tax they pay in this country, and they would certainly be happy the government is taking action to rein it in,” Dr Sangkuhl says.
“Worldwide lost revenues through the use of transfer pricing have been estimated at over $1000 billion per annum, and one good approach would be to legitimately calculate what sales are being made by the multinationals in each individual country as a starting point, and working from there.”
But Dr Sangkuhl says these claims are disingenuous, and instead fit the narrative employed by large companies in an effort to convince governments to lower tax and join in the race to the bottom in terms of taxing multinational corporations.
“Only three days ago Rio Tinto warned the federal government that any attempt to crack down on tax minimisation strategies used by global companies such as Google and Amazon could ‘come back to bite’ Australia.”
28 November 2012