AMP not avoiding tax, says CEO Craig Meller
AMP chief executive Craig Meller has launched an aggressive defence of the company’s international taxation arrangements after the financial services giant was named among some of the world’s biggest multinationals that allegedly channelled funds through Luxembourg to minimise their tax bills.
The recent meeting of the G20 leaders in Brisbane endorsed a push by the Organisation for Economic Co-operation and Development to crack down on profit shifting by multinationals to allegedly avoid tax.
The push has been backed by the likes of Rio Tinto chairman Jan du Plessis and Wesfarmers chief executive Richard Goyder.
But in AMP’s first public comments on the issue after being named by the International Consortium of Investigative Journalists alongside the likes of the Future Fund, Macquarie Group and Lend Lease for using the tax haven of Luxembourg, Mr Meller said bluntly: “We are not Google.”
“We are not saying we operate in every country around the world and chose the country we push profits to pay the least tax. You can look at our accounts and see we pay a fair rate of tax,’’ he told The Australian.
“All that stuff that came out from that leak in Luxembourg is trying to insinuate that we did the wrong thing. That is simply not the case. We have been through this with the ATO and they are very clear on what we are doing.”
Mr Meller used the example of AMP’s infrastructure business, where it is partnering with sources of foreign money to invest in global infrastructure assets and the asset managers reside in Australia.
AMP recently closed a $1 billion infrastructure debt fund that was largely backed by Chinese and Japanese money.
“We are collecting money from China and Japan. And so far most of it is being invested in the US,” Mr Meller said.
“That is one of the reasons why you need to have investment vehicles in Luxembourg. You can’t clip the Australian tax ticket on the way through. So a mountain has been made of a molehill there.
“If you want to export investment services, you have to give tax-clean solutions to international investors so that they pay tax in the country where the asset is and tax in the country of their domicile and not tax in a third-party country because the investment manager happens to come from there.”
He used the example of an investment by Japanese money in the AMP fund, which then invested in a Spanish oil pipeline.
“They will pay their tax in Spain on that investment and they will pay profits on what they make in Japan,” he said.
“They don’t expect to pay corporations tax in Australia because it happens to be an Australian investment manager. The profits we make out of that, of course we pay tax on it in Australia. It is not tax transference.”
Australian Taxation Office commissioner Chris Jordan said last week that just because a company had an entity in a tax haven “doesn’t mean you’re dodging Australian tax”.
Mr Meller’s comments come after BHP Billiton chief executive Andrew Mackenzie and ANZ chief executive Mike Smith earlier this month called on governments to take a co-ordinated approach to any crackdown on tax avoidance, warning that ‘‘double taxation” would have a damaging impact on business investment.
Peter Nash, chairman of KPMG Australia and a member of the global and regional boards of the accounting giant, also said reforming the tax system to deal with profit shifting was a “very complex issue” that could have serious unintended consequences if it was not done properly.
