KPMG says be cautious in tax reform
Tax and business consultants KPMG are warning the government to be cautious in reforming corporate tax law in its moves to target offshoring of corporate profits.
In its submission to the Senate inquiry examining corporate tax avoidance, KPMG said while governments need to ensure they are receiving appropriate amounts of tax from large corporations, it’s important they don’t discourage the companies from investing capital.
It said Australia was a capital importing country – at the end of 2011, foreign firms invested nearly twice as much in Australia as Australians invested overseas.
‘The case for reforming Australia’s current tax laws to deal with emerging threats must take appropriate account of international competition for global capital flows,’ it said.
The Senate economics references committee is inquiring into corporate tax avoidance, particularly the adequacy of existing laws and their enforcement by the Australian Taxation Office and the Australian Securities and Investments Commission.
The inquiry opened in Sydney on Wednesday with three of the world’s biggest tech companies – Apple, Google and Microsoft – declining to disclose how much of their combined $8 billion in revenue was sent offshore.
All are being audited by the Australian Taxation Office, amid suspicions of profit shifting and employing aggressive tax minimisation strategies.
In other evidence to the inquiry, tax commissioner Chris Jordan said the tax office did everything it could within existing laws to ensure multinational companies paid tax in Australia.
The inquiry moves to Canberra on Thursday with representatives of KPMG, the Treasury and Australian Securities and Investments Commission to give evidence.
