ATO Commissioner Urges Int’l Collaboration On BEPS

Unprecedented international collaboration is needed to overcome a single-, isolated-country view to tackling base erosion and profit shifting (BEPS) issues, Andrew Mills, Second Commissioner of Australian Taxation Office (ATO) for Law Design and Practice, has said.

In a speech delivered at the Second Annual Tax Forum organized by the Tax Institute of Australia on October 9-10, 2014, Mills said: “As multinationals are operating across borders seamlessly by taking a global, top-down view to structure their operations across countries, administrators and policy makers need to do the same.”

Mills said that Australia is at the forefront of efforts to reform the international tax system to keep pace with rapid advances including with respect to globalization and the digital economy.

Mills reinforced the widely-held view that “companies should pay tax in the country where the real economic activity occurs and where the profit is earned.” He said that most corporate taxpayers willingly comply with their obligations, but there are a minority who use sophisticated tax arrangements to gain an unfair advantage over others. He added that the federal Government is committed to tackling these tax arrangements.

“On many occasions, Treasurer Joe Hockey has stated that Australia is open for business. Recently, on September 4, the Treasurer remarked that ‘opening our doors also means ensuring multinational companies pay tax in Australia on the income they earn here.’ The Treasurer highlighted the multilateral work being undertaken by the ATO and asked the Commissioner to do more in this area. The ATO’s BEPS strategy aligns with the goals of the G20 and recent statements by the Treasurer,” Mills said.