Macquarie won concessions ahead of offshore banking tax crackdown
Macquarie Group successfully lobbied the Abbott government to water down and delay moves to tighten laws over which the bank is fighting a tax battle worth hundreds of millions of dollars.
Fairfax Media has learnt that Macquarie was among industry players who attended a November 6 meeting with then-assistant treasurer Arthur Sinodinos at which the controversial issue of offshore banking units was discussed.
Moves by the previous government to crack down on the use of OBUs, which had already been delayed, were watered down the same day and further delayed in January.
Senator Sinodinos, who formerly worked for NAB, stepped aside as assistant treasurer last month after being called as a witness at the ICAC inquiry into former NSW Labor minister Eddie Obeid.
The Australian Taxation Office last year hit Macquarie with a very large tax bill, on which the bank has already made a part-payment of up to $295 million, over its use of OBUs in 2006, 2007 and 2008.
Macquarie declined to comment.
Concerns that banks were abusing OBUs, which attract a concessional tax rate of 10 per cent, prompted the former Labor government to announce new rules in May last year.
The changes were due to take effect on October 1 but, after the September election, the Liberal government put off the start date. In a press release issued late on Sunday, September 29, Senator Sinodinos said a delay was ”necessary in order to give business the certainty that it needs to comply with the tax laws”.
On November 6, Senator Sinodinos canned a provision that would have excluded related party transactions from OBUs and said consultation with industry ”will begin soon”.
On the same day, Senator Sinodinos met representatives of the Commonwealth Bank, Westpac, NAB, ANZ, Macquarie and AMP.
Industry groups, the Australian Bankers Association and the Australian Financial Markets Association, also attended, as did accounting firms PwC, Ernst & Young, KPMG and Deloitte.
On January 30 Senator Sinodinos announced the new OBU rules would now start on July 1 next year. ”While the government is committed to ensuring that the integrity of our business tax system is maintained, reforms that modernise the offshore banking unit regime will contribute to Australia’s development as a financial services centre,” he said.
Acting Assistant Treasurer Mathias Cormann plans to hold further industry talks later this year.
Credit: SMH
