Multinational tax crackdown in limbo
A planned crackdown on multinational tax dodgers could be in limbo after Labor backed changes to force large companies to submit yearly financial statements.
The opposition and the Greens joined forces on Tuesday to back amendments by independent senator Nick Xenophon that would force the bill back to the House of Representatives.
The move provoked the ire of Finance Minister Matthias Cormann who warned the Senate would merely delay laws to stop global companies shifting profits and avoiding tax in Australia.
He indicated the lower house would not support the changes, forcing the Senate to eventually decide whether to insist on them and potentially launching the bill into limbo.
“This very important piece of legislation will not pass the parliament and will have to come back to the Senate down the track,” he told the upper house on Tuesday.
The changes would require companies earning more than $1 billion to fork over general purpose financial statements each income year.
Labor, the Greens and crossbenchers believe they boost transparency while bringing into line reporting conditions for large multinationals with smaller publicly listed companies in Australia.
But Senator Cormann said the amendments only added red tape and wouldn’t make “one iota of difference”.
He accused Labor of “putting themselves on the side of multinational tax avoiders”.
Senator Xenophon laughed off excuse of red tape as “completely farcical”.
“To suggest that those companies somehow are going to find that onerous, I don’t think there’s a violin small enough in the world to play to say that that argument has any validity,” he said.
Labor senator Sam Dastyari said it would be pathetic if the government refused to back its own legislation because the Senate had improved it.
“It puts in neon lights what a cop-out, pathetic, weak, embarrassing position this government is prepared to take,” he said.
“This is a bill, we’ve said from the start, that we don’t believe is perfect.”
Greens senator Peter Whish-Wilson accused the government of attempting to hold political parties and taxpayers to ransom.
“That’s what our job is here in the Senate – to improve legislation,” he said.
The bill, introduced by former treasurer Joe Hockey, imposes stronger penalties for large companies engaging in tax avoidance and profit shifting.
It also introduces country-by-country reporting to give tax authorities greater visibility of multinationals’ tax structures.
