The OECD has released an important report on action to tackle multinational profit shifting and tax avoidance. It's a welcome step forward, but now we need the Treasurer to step up and get its recommendations delivered both in Australia and around the world.
OECD TAX PLAN MEANS CRUNCH TIME FOR HOCKEY
With the release overnight of a pioneering report on tackling multinational tax avoidance, it is time for Treasurer Joe Hockey to stop talking big and start taking real action.
The report outlines the first set of concrete multilateral initiatives to block base erosion and profit shifting. It has been prepared by the Organisation for Economic Co-operation and Development in consultation with representatives of more than 110 tax jurisdictions globally.
The release of these initiatives comes ahead of the G20 Finance Ministers meeting this weekend in Cairns. At that meeting Joe Hockey will have a much-needed opportunity to show he can deliver more than rhetoric when it comes to making major companies pay their fair share of tax.
To date, the Coalition’s only real actions on this have been to walk away from closing $1.1 billion in tax loopholes, and to stall on signing Australia up to new bank transparency measures.
In particular, Joe Hockey should use Australia’s position as G20 chair to push for a clear and specific timetable on creating a multilateral tax instrument. This is an innovative way to update bilateral tax treaties to ensure tax loopholes are closed over time – and stay closed.
He must also lock in country-by-country reporting requirements for companies operating in multiple jurisdictions. Requiring big multinationals to report on their income, profits and the taxes paid in each country where they do business will leave them with far fewer ways of hiding their real profits.
The OECD’s initiatives are fundamentally about ensuring that businesses make a fair contribution back to the countries where they make profits.
What we need now is real leadership to get these initiatives working in Australia and the other OECD/G20 nations.
This is Joe Hockey’s chance to show that he can be just as tough on multinational firms as he’s willing to be on Australia’s pensioners and students.
WEDNESDAY, 17 SEPTEMBER 2014
MEDIA CONTACT: JENNIFER RAYNER 0428 214 856