Showing posts with label corporations. Show all posts
Showing posts with label corporations. Show all posts

Wednesday 18 December 2019

Yet another indicator that tax minimisation is out of control in Australia


The Australian Taxation Office (ATO) as part of its transparency commitments released the latest corporate tax transparency report on 12 December 2019 covering 2,214 of the highest income companies trading in Australia in 2017-18.

These 2,214 companies reported annual incomes ranging from $66.87 billion down to $100.01 million.

Contained in the total number of companies were,1,791 with annual incomes over $100 millionAmongst this group were 1,197 foreign-owned entities.

The 32 per cent companies with tax payable in 2017-18 had tax liabilities ranging from $4.3 billion on an income of $42.37 billion down to $1,600 on an income of $125.36 million.

Additionally, 710 companies on the ATO list did not pay any tax that financial year.

ABC News, 12 December 2019:

The reasons why 710 companies did not pay any tax in 2017-18 included:
  • 269 entities that reported a taxable income but prior-year losses were available to deduct against that profit, so no tax was payable
  • 242 entities reported an accounting loss
  • 146 entities reported an accounting profit but reconciliation items (such as tax deductions allowed at higher rates than accounting permits) resulted in a tax loss
  • 53 entities reported a taxable income but were also entitled to offsets (such as the research and development tax incentive) at least equal to the tax otherwise payable
THE TOP 20 NON-TAXPAYING COMPANIES IN 2017-18 (going from highest annual income of $10.51 billion to lowest annual income of $3.03 billion) are:

TOYOTA MOTOR CORPORATION AUSTRALIA LTD, EXXONMOBIL AUSTRALIA PTY LTD, FLORA GREEN PTY LTD, VIRGIN AUSTRALIA HOLDINGS LIMITED, TOLL HOLDINGS LIMITED, AUSTRALIA PACIFIC LNG PTY LTD, CHEVRON AUSTRALIA HOLDINGS PTY LTD, AMCOR LIMITED, PEABODY AUSTRALIA HOLDCO PTY LTD, HOPE DOWNS MARKETING COMPANY PTY LTD, QGC UPSTREAM HOLDINGS PTY LIMITED, FERROVIAL SERVICES AUSTRALIA PTY LTD, GRAINCORP LIMITED, SANTOS LIMITED, VODAFONE HUTCHISON AUSTRALIA PTY LTD, BBP AUSTRALIA HOLDINGS PTY LTD, CBH GRAIN PTY LTD, ROY HILL HOLDINGS PTY LTD, PIONEER SAIL HOLDINGS PTY LTD, IBM A/NZ HOLDINGS PTY LIMITED.

* Image from.zippia.com 

Monday 24 September 2018

When it comes to protecting Clarence Valley water resources "Castillo's credibility is wearing very thin indeed"


This is a basic map clearly showing a historic cluster of small abandoned mine sites in the vicinity of the Mann River, one of the principal tributaries of the Clarence River which is the largest coastal river in New South Wales. 

The old Cangai Mine site is now part of a Castillo Copper Limited exploration lease and its proximity to the Mann River is apparent.

As the crow flies the distance between this site and the Mann River is estimated to be less than 4 kms and Cangi Mine is also bounded on three sides by three creeks which feed into the Mann.




Following North Coast Voices posting Castillo Copper Limited's Jackadgery Project: has spinning the truth already begun? on 17 September 2018 one Clarence Valley resident sent me an email which pointed out a curious ommission in Castillo Copper Limited exploration licence application this mining company:

"However, under Section 19.4 beneath the heading: “Surface water sources”, is the following requirement:

“Provide details of the existing surface water sources in the area that are likely to be affected by the activity. Provide details of the nearest watercourse/s and the distance between the proposed disturbance area/s and the nearest watercourse/s”.

Castillo's Response

“The proposed activity area bounded by Bobward creek from the west and Smelter creek from the east. The distance from disturbance area to Bobward creek is 550 – 620m; the distance to Smelter creek is about 500m. The water for drilling if required will most likely will be taken from Bobward creek. Permission has been sought and granted by the landowner”.

No mention of the Mann or Clarence in the entire document.

Talk about "dodgy". Castillo's credibility is wearing very thin indeed,"

BACKGROUND

North Coast Voices, 17 September 2018, Castillo Copper Limited's Jackadgery Project: has spinning the truth already begun?

Saturday 12 May 2018

Quotes of the Week


“Meeting the narrow test of legality is not a licence to be a bastard”  [Journalist Peter Hartcher writing  about corporations in The Canberra Times, 5 May 2018]


“budget's forecasts and projections, prepared by that well-known Italian economist, Rosie Scenario”  [Economics editor Ross Gittens writing in The Sydney Morning Herald about Federal Budget 2018-19, 8 May 2018]

Thursday 22 February 2018

So Prime Minister Turnbull has been bitiching again about the ABC's reporting



On 14 February 2018 ABC News’ economic journalist Emma Alberici wrote:

It's also disingenuous to talk about a 30 per cent rate when so few companies pay anything like that thanks to tax legislation that allows them to avoid paying corporate tax. Exclusive analysis released by ABC today reveals one in five of Australia's top companies has paid zero tax for the past three years.

On that same day the House of Representatives Hansard recorded these mentions:

Mr THISTLETHWAITE (Kingsford Smith) (10:12): ………All of these hardworking Australians would be thrilled to know—very pleased to know—that the ABC has uncovered that about one in five Australian companies pay no company tax whatsoever in this country. Yes, that's right: 380 of Australia's largest companies pay absolutely no income tax at all—a big doughnut; a big fat zero. They include airlines, banks, financial service companies, mining, energy, clothing, steel, and telecommunications companies. There's even a condom manufacturer. That's rather appropriate, given what they've just done to the Australian taxpayer in paying no tax at all during the course of the last couple of years…..

Mr THISTLETHWAITE (Kingsford Smith) (13:49): As mums and dads pack up the kids, send them off to school and head off to work; as pensioners struggle to put the air-conditioner on because of rising electricity costs; and as students face increases in their fees because of cuts to TAFE and cuts to funding for education—these hard-working Australians, as they head off to jobs and study today, would be pleased to know that the ABC has uncovered that one in five Australian companies pay absolutely no company tax in this country. That's right, 380 of Australia's largest companies paid absolutely zero company tax over the course of the last three years. They include airlines, energy companies, mining companies, clothing companies, banks, insurance companies and a manufacturer of condoms—which is highly appropriate, given the rogering that they've just given Australian hardworking taxpayers by paying no tax. Now, given that these companies pay no corporate tax, what is the response of the Turnbull government? The response of the Turnbull government is to give them a tax cut. These companies are struggling so much that we're going to give them a tax cut! Yes, that's right: 380 of the largest companies that pay no tax will get a tax cut, despite the fact that they're increasing taxes for Australian workers by putting up the Medicare levy. We won't cop it. Labor will oppose these tax cuts and we'll stand up for average, hard-working, battling Australians……

Mr TURNBULL (Wentworth—Prime Minister) (14:03): I thank the honourable member for her question. The government is supporting and delivering lower business taxes because we know they will result in more investment and more jobs. Company tax is ultimately a tax on workers. When nearly nine in 10 Australians work for private business, surely it is obvious that it's in the national interest to support the companies that employ the overwhelming majority of Australians. But, instead of supporting policies that will create jobs and grow wages, the opposition is busy peddling the myth that business does not care about the level of tax and doesn't in fact pay tax. I'm not sure where the $68 billion of company tax receipts came from, but, according to the Labor Party, companies don't pay tax. The Labor Party wants to increase taxes; the government wants to reduce them. But we do not believe that paying tax is optional. Every Australian and every business that makes a profit in Australia must pay their fair share of tax. You'd think that was common sense, but not for the opposition. Like everything the opposition leader does, he calls for action one minute and then opposes it the next. He called for action against multinational tax avoidance and then he voted against some of the toughest anti-avoidance laws in the world. If this isn't clear enough for the members opposite, we'd be happy to arrange a briefing with officials from the Australian Taxation Office. We have introduced and, no thanks to the Labor Party, passed through the parliament some of the toughest multinational tax avoidance laws in the world. At that briefing from the ATO, I am sure that those distinguished officials will be able to provide a tutorial on the difference between revenue and profit because members opposite either don't understand the difference or they're now calling for businesses to be taxed on revenue—not profit— even if the business makes a loss. We saw that they were busily retweeting the article—one of the most confused and poorly researched articles I've seen on this topic on the ABC's website. Of course, the ABC is an enterprise that understands profit and loss.

Opposition members interjecting—

Mr TURNBULL: It does! It understands taxes; they're recipients of them. They receive them—taxpayers' funds. They understand the difference: the hard work of investing and struggling and losing money one year and then being able to offset it against profit the next—or not. No, the ABC has the same understanding of the commercial world as does the opposition. (Time expired)

The Australian Financial Review scenting blood after the prime minister’s criticism went to print with this disingenuous take on 15 February 2018:

Both premises fatally expose their author's innumeracy. The first is demonstrably false. Freely available data produced by the Australian Taxation Office show that 32 of Australia's 50 largest companies paid $19.33 billion in company tax in FY16 (FY17 figures are not yet available). The other 18 paid nothing. Why? They lost money, or were carrying over previous losses.

I’m sure North Coast Voices readers will quickly notice that Alberici was citing statistics for a baseline of around 1,900 companies and the ‘Fin Review’ columnist was citing a baseline of 50 companies - so of course the number of companies paying no tax to the number of companies paying tax is going to differ between the two baselines.

Reading the full text there does not appear to be any factuall inaccuracies in the Alberici article being complained about.

Meanwhile ABC News withdrew the online version of the economic analysis


 and updated Alberici’s companion article in order to provide further information and context.

The companion article still contains those same statistics:

Analysis by the ABC reveals Qantas is not alone — about 380, or one in five, of Australia's largest companies have paid no tax for at least the past three years.

However, these opening lines written by Alberici in the article “There's no case for a corporate tax cut when one in five of Australia's top companies don't pay it” on 14 February are now missing in action as this analysis gently sinks to the bottom of the Internet:

There is no compelling evidence that giving the country's biggest companies a tax cut sees that money passed on to workers in the form of higher wages.
Treasury modelling relies on theories that belie the reality that's playing out around the world.

Since the peak of the commodities boom in 2011-12, profit margins have risen to levels not seen since the early 2000s but wages growth has been slower than at any time since the 1960s.

The Guardian reported on 16 February that:

Guardian Australia understands ABC News management has been in crisis meetings for two days after the prime minister attacked the articles in question time and then wrote formal letters of complaint to management.

I suspect that what Turnbull took umbrage to in the first place was the fact that one article took a stronger position on why corporate tax cuts were not good for the economy or wages growth and, therefore were unlikely to benefit workers and their families and, the other article which is still online did not address this aspect of government taxation policy.

So he set out to shoot the message down and be damned to the fate of the messenger.

Of course in attempting this Turnbull created a Steisand Effect With A Twist - ensuring that the full text of There's no case for a corporate tax cut when one in five of Australia's top companies don't pay it” has been copied onto websites he can't bully and the article's analysis is still being discussed by voters.

BACKGROUND

https://www.theaustralian.com.au/...abc-turnbull.../story-fna045gd-1226869241476?...
Jan 26, 2018 - COMMUNICATIONS Minister Malcolm Turnbull says ABC board members who do not want to get involved in ensuring news content on the public broadcaster is accurate and impartial should get off the board. Revealing he receives hundreds of complaints about the ABC each week, MrTurnbull said “the ..


https://www.dailytelegraph.com.au/...turnbull...abc.../ff6ad001ced93bb9c40eee1f4c839...

Dec 2, 2013 - THE minister in charge of the ABC, Malcolm Turnbull, rang the broadcasters boss Mark Scott last week to tell him he had made an “error of judgment” in teaming with the Guardian to run revelations that the Indonesian presidents phone was bugged.


https://delimiter.com.au/.../watch-turnbull-implies-complained-abc-failed-nbn-coverag...
Feb 4, 2016 - Prime Minister Malcolm Turnbull appears to have implied that he made the samecomplaint to ABC management that he has previously made in public before the 2013 Federal Election, stating that the broadcaster had "failed" to provide balanced coverage of the competing National Broadband Network ...

This report contains the total income, taxable income and tax payable of over 2000 corporate tax entities for the 2015-16 year. This report also includes separate lists of entities whose information was not available by the cut-off date to produce the Report of Entity Tax Information for 2013-14 and 2014-15.

Monday 9 May 2016

Australian Federal Election 2016: corporations behaving badly


Since the Turnbull Government announced it was returning some of the Abbott funding cuts to Australia's corporate watchdogs (by way of an increase in an existing levy on banks and other financial institutions) the mainstream media has started to move on from commenting on what appears to be endemic corruption in corporate Australia.

The exception to that observation is The Guardian who reported on The Australia Institute report and also compiled a banking scandal list.


A new report analysing findings from across several corporate regulatory bodies and related agencies finds widespread wrong-doing in the Australian private sector. 
Meanwhile the six major regulatory bodies and other agencies have seen 3,926 staff cut (or 14.9%) between the 2013-14 and 2015-16 budgets – meaning there are less cops on the corporate beat.
The research, commissioned by the ACTU, reviews figures from the Australian Competition and Consumer Commission (ACCC), Australian Securities and Investments Commission (ASIC), Australian Tax Office (ATO), Fair Work Ombudsman, Fair Work Commission and Australian Bureau of Statistics (ABS).


* The Australian Tax Office (ATO) annual reports were examined to determine the extent of tax evasion and avoidance. Overall the ATO figures and discussion suggest that in the ATO's normal course of business it recovers huge amounts from companies and other businesses that attempt to conceal their liability for taxation. In earlier years the ATO was prosecuting over 500 companies a year and still prosecutes 300 a year, the downward trend possibly reflecting the staffing reductions. It settles with many more and as a result recovers some $3.5 billion in tax from companies attempting to hide their profits. Companies also try to underpay the GST and other indirect taxes as well as PAYG on behalf of their employees; those amounted to $6.3 billion in the latest year for which there is complete data. One of their compliance programs, the taxable payments reporting system' specifically targets building and construction firms and has recovered $2.3 billion for the year 2012-13 alone. Similar successes have been recorded in relation to the other specific target groups such as the international profit shifting program.

* On Tuesday the 5th of April 2016 The Australian Financial Review published nine stories on wrong-doing or alleged wrong-doing on the part of the Australian corporate sector:

1. Banks considering legal action against the board of Arrium (a listed company) for drawing down a loan while simultaneously seeking to negotiate offloading debt at a large discount (page 1 and 11),

2. Panama leaks suggest BHP's many British Virgin Island companies established to create profits appear on the British side of the company (p. 1),

3. WIN alleged Nine Entertainment broke its supply agreement with a streaming service (p. 2),

4. Ken Henry (NAB chair) supported calls for Australian companies to take more responsibility for misdeeds and ASIC wanting to make boards criminally responsible for bad conduct (p. 6),

5. BHP threatening to fire a law firm in Panama for wanting to undertake due diligence on BHP's operations.

6. Queensland Nickel likely to go into liquidation without making provision for workers' entitlements (p. 8),

7. ASIC to 'nail' a second among the big four banks following court proceedings against ANZ (p. 12),

8. Rate rigging probe to investigate other big four banks (p. 15), and

9. CBA facing senate inquiry into charges, inter alia, that it overlooked three whistle-blower claims, ANZ had been examined over links with corruption scandal in Malaysia (p. 15).

A casual check of the front page the previous day suggested this is not unusual, with the lead story of the ATO targeting 800 wealthy individuals using corporations and other structures in tax havens and involving 'suspected money laundering, arms and drug deals, and tax avoidance'. This of course referred to the suspect activities organised by the law firm Mossack Fonseca and largely operating out of Panama.1 Another page one story refers to the takeover of Asciano, which was supposed to involve three independent entities but suggests that common ownership will thwart that independence against the deal negotiated with the ACCC.

*The April 5 articles involved five of the top 10 listed companies in alleged wrong-doing in just one day of news, suggesting such malfeasance is rife among Australia's leading companies. That impression gave rise to this paper which attempts to provide some estimate of the magnitude of the problem. To that end the paper examines various data sources that give a more complete picture of corporate behaviour in Australia. In generating a database of misbehaviour it has to be appreciated that regulators are inclined to settle with corporate wrong-doers. The compliance pyramid used by many regulatory agencies is specifically designed to begin with activates such as education and negotiation and ending with legal proceedings. Usually the number of cases diminishes rapidly as the government agency moves up the compliance pyramid.

In generating a database of misbehaviour it has to be appreciated that regulators are inclined to settle with corporate wrong-doers. The compliance pyramid used by many regulatory agencies is specifically designed to begin with activates such as education and negotiation and ending with legal proceedings. Usually the number of cases diminishes rapidly as the government agency moves up the compliance pyramid.

* The Australia Institute has examined ACCC media releases over the last ten years (from 2006). A total of 92 matters covered by media releases were published relating to ACCC action against companies included in the top 50 listed corporations. On 29 occasions the ACCC took legal action and gained either a ruling in its favour or an out of court settlement. On the other 63 issues, the ACCC did not proceed with litigation, but made administrative proceedings, recommendations or expressed concern.

Of the 92 issues the ACCC took some action on, three companies were involved in 56 of them – the Woolworths, Wesfarmers (parent company of Coles) and telecommunications giant, Telstra.



* ASIC has the power to commence prosecutions, usually through the Director of Public Prosecutions. In the four and a half years to December 2015 it successfully concluded 3,115 cases against corporations. ASIC reports on enforcement activities every six months.19 These include only cases that have been successfully concluded. The areas of enforcement include market misconduct, corporate governance misconduct and financial services misconduct for both large and small businesses. The types of enforcement include criminal and civil proceedings, administrative remedies and enforceable undertakings and negotiated outcomes.

The Guardian, Timeline: banking scandals in Australia since 2009 (in reverse order), 29 April 2016:

Wednesday 6 April 2016
Former ANZ planner jailed for stealing almost $1m  - jailed for more than six years….for stealing almost $1m from an elderly client to feed a gambling debt. ANZ promised to reimburse the victim…..

Tuesday 5 April 2016
Westpac subsidiary paid penalties of $493,000 after breaching consumer protections - Asic found it breached important consumer protection provisions relating to the repossession of motor vehicles, including failing to provide customers with default notices prior to commencing enforcement proceedings to repossess mortgaged vehicles; and failing to provide customers with legally required information setting out their rights within the required time frame after it repossessed mortgaged vehicles.

Tuesday 5 April 2016
Asic sued Westpac over alleged market manipulation in setting bank bill swap rate - Asic started legal proceedings in the federal court in Melbourne against Westpac for unconscionable conduct and market manipulation in relation to Westpac's involvement in setting the bank bill swap reference rate in the period 6 April 2010 and 6 June 2012. It is alleged that Westpac traded in a manner intended to create an artificial price for bank bills on 16 occasions during the period of 6 April 2010 and 6 June 2012….

Monday 4 April 2016
ANZ announces it reported three breaches of dispute resolution requirements - ANZ told a parliamentary inquiry that for 2014-15, it had reported three breaches of the internal dispute resolution requirements under the code of banking practice to the code compliance monitoring committee and six in 2013-14. Two breaches for 2014-15 were self-identified and one was raised with ANZ by the committee.

Wednesday 30 March 2016
ANZ announced it would refund $5m - …..to 25,000 customers after it failed to properly apply some fee reductions and fee waivers for certain customers….

Thursday 17 March 2016
Asic imposed conditions on Macquarie financial services license - Asic imposed additional conditions on Macquarie Bank Limited's Australian Financial Services (AFS) licence for breaches relating to the handling of client money between March 2004 and 2014. The breaches raised issues including failing to deposit monies into a designated client trust account; and making withdrawals that were not permitted from such an account….

Tuesday 15 March2016
ANZ gives $4.5m compensation for breaches - ANZ confirmed engagement of PricewaterhouseCoopers in January 2016 to conduct an independent compliance review within its OnePath subsidiaries, following compliance breaches that were proactively reported to Asic from early 2013. Since February 2013, ANZ has compensated about $4.5m to around 1.3 million OnePath customers for breaches including not following up on some unbanked cheques and for superannuation contributions not being allocated to the customer's correct account.

Read the rest of the seven year timeline here.

The Australian, December 2015:

NAB boss Andrew Thorburn earned $5.5 million for his first full year in the banking giant's top job.
Mr Thorburn's remuneration package for the year to September 30 was largely made up of $2.3m in cash and more than $3m in cash and share-based bonuses.
During 2013-14 he earned $2.2m as the head of NAB's Bank of New Zealand subsidiary before taking on NAB's top job on August 1 last year.
His pay packet was dwarfed by his contemporaries at ANZ and the Commonwealth Bank.
ANZ boss Mike Smith received total remuneration worth $10.8m, including a $3.3m cash salary, while Commonwealth Bank chief executive Ian Narev's pay fell to just under $8m.
Gail Kelly collected nearly $12m before she left the chief executive's chair at Westpac in February.


On 4 June 2015 the House of Representatives referred an inquiry into the impairment of customer loans to the committee for inquiry and report by 31 March 2016.
On 4 June 2015 the committee resolved that:
* in conducting the inquiry the committee will not investigate or seek to resolve disputes between customers and banks; and
* where the experiences of customers may inform the committee about the practices of banks, the committee welcomes submissions that explicitly address the terms of reference.
On 22 July 2015 the committee extended the closing date for submissions to 21 August 2015.
On 2 March 2016, the House of Representatives granted the committee an extension of time to report until 20 May 2016.
On 15 April 2016, the inquiry lapsed due to the prorogation of the House of Representatives.
On 19 April 2016, the committee resolved to re-adopt the inquiry using the same terms of reference as the original inquiry referred by the House of Representatives on 4 June 2015 but with a reporting date to be determined by the committee.
This still sitting inquiry has held 8 public hearings to date and received 195 submissions.
Here are excerpts from one submission concerning a home build in a suburb with a median house price of over $1.5 million:
* BankWest insisted that the mortgage was only available to us as a Commercial Loan Facility due to the size of the build. We were told this was appropriate even for a private residence.
 * BankWest was so inefficient with their drawdown to pay the builder and quantity surveying checks, that months of building time were lost. It could take up to 4 weeks to get an approved drawdown. Building stopped during this period......
* At this point no loans were in arrears
* BankWest stopped all contact.
* BankWest increased interest rates to a default 18.5%.....
* ......were offered $11.5m by a third party for the house so long as it was completed.
* BankWest refused the offer.
* BankWest refused to complete the house
* BankWest charges kept accruing.
* BankWest denied all contact with us for nearly 12 months whilst charges kept accruing.
* BankWest appointed receivers.
* Receivers charged huge fees
* BankWest devalued the property extremely low
* .....were denied any right to see valuation.
* ..... were denied any right to see monies being spent.
* .....were denied any right to see any administration costs.
* BankWest then completed the build of the property.as per our request 12 months earlier.
* The completion cost of the build was blown out with huge administration charges and interest.
* BankWest then sold a potential $10m property undervalued with only a 3 week sales campaign.
* Coincidently the only bidder at the auction was a senior executive from NAB whose opening bid was the approximate amount of the mortgage.
* The receiver’s then set a seller opening bid of $7,225,000 and instructed the auctioneer to announce that anyone who paid $1.00 more for this property would purchase the property today.
* BankWest Lawyers were threatening and acted unconscionably. I have to state in my life I have never felt so threatened and shaken by a conversation.
* BankWest demanded we pay an an extra $500K in extra charges.
* At this point I contacted the Banking Ombudsman.
* Within 48 hours of the Ombudsman contacting BankWest they immediately dropped the extra $500,000 of extra charges. Why?
* BankWest demanded that I signed a confidentiality agreement about this process.
* BankWest demanded that I signed an agreement agreeing never to take legal action against them.
* No documents relating to the sale or process were ever provided. [my red bolding]

Thursday 5 May 2016

The Turnbull Government and multinational tax avoidance


On 2 October 2014 the Australian Senate referred the matter of corporate tax avoidance and aggressive minimisation to the Economics References Committee for inquiry and report by the first sitting day of June 2015 and, after repeated extensions, on 2 May 2016 the Senate granted the committee a further extension to report by 30 September 2016. 

The committee’s interim reports clearly indicated that the Australian taxation system was being gamed by foreign-based multinationals using aggressive tax practices such as avoidance of permanent establishment, excessive debt loading, aggressive transfer pricing, and the use of tax havens.

On 11 December 2015 the C’wealth Multinational Anti-Avoidance Law (MAAL) came into effect and, its provisions applied from 1 January 2016 to corporations with global annual incomes of AU$1 billion and over and consolidated groups with a parent entity having a global annual income of AU$1 billion and over.

MAAL was designed to counter the erosion of the Australian tax base by multinational entities using artificial or contrived arrangements to avoid a taxable presence in Australia, adding to anti-tax avoidance measures already found in the Income Tax Assessment Act 1997.

However, less than three months later on 26 April 2016, the Australian Taxation Office (ATO) discovered that some taxpayers are entering into artificial and contrived arrangements to avoid the application of the MAAL.

On 3 May 2016 the Turnbull Government released a consultation paper on its proposed Diverted Profits Tax (DPT).

The DPT will impose a 40 per cent tax rate on corporations and consolidated groups with global annual incomes in excess of AU$1 billion that reduce the tax paid on the profits generated in Australia by more than 20 per cent by diverting those profits to low tax jurisdictions. The government hopes to have this new law in place by 1 July 2017.

According to the consultation paper both the Multinational Anti-Avoidance Law and the Diverted Profits Tax are based on Britain’s diverted profits tax introduced on 1 April 2015.

One can only hope that both these laws will be more effective than the U.K. law on which they are based. Because less than eight months after that law was introduced it was found to be ineffective in stopping large multinationals from diverting profits to low tax jurisdictions. As an example, Google with its U.K. advertising revenue held in low taxing Ireland had not had to make payments under the new diverted profits tax.

There is no way that multinationals operating in Australia will not mount legal challenges if the ATO attempts to impose penalties under provisions in MAAL and DPT

To some extent the loser will always be federal government revenue because, successful or otherwise, the corporate millions spent in legal fees fighting the tax man are apparently tax deductible.

Monday 18 April 2016

Global corruption of democracy in the 21st Century


The Guardian UK, 11 April 2016:

Because at root, the Panama Papers are not about tax. They’re not even about money. What the Panama Papers really depict is the corruption of our democracy.

Following on from LuxLeaks, the Panama Papers confirm that the super-rich have effectively exited the economic system the rest of us have to live in. Thirty years of runaway incomes for those at the top, and the full armoury of expensive financial sophistication, mean they no longer play by the same rules the rest of us have to follow. Tax havens are simply one reflection of that reality. Discussion of offshore centres can get bogged down in technicalities, but the best definition I’ve found comes from expert Nicholas Shaxson who sums them up as: “You take your money elsewhere, to another country, in order to escape the rules and laws of the society in which you operate.” In so doing, you rob your own society of cash for hospitals, schools, roads…

“Those who exited our societies are now also exercising their voice to set the rules by which the rest of us live”

But those who exited our societies are now also exercising their voice to set the rules by which the rest of us live. The 1% are buying political influence as never before. Think of the billionaire Koch brothers, whose fortunes will shape this year’s US presidential elections. In Britain, remember the hedge fund and private equity barons, who in 2010 contributed half of all the Conservative party’s election funds – and so effectively bought the Tories their first taste of government in 18 years.

To flesh out the corrosion of democracy that is happening, you need to go to a Berlin-born economist called Albert Hirschman, a giant in modern economic thinking. Hirschman died in 2012 at the age of 97, but it’s his concepts that really set in context what’s so disturbing about the Panama Papers.

Hirschman argued that citizens could protest against a system in one of two ways: voice or exit. Fed up with your local school? Then you can exercise your voice and take it up with the headteacher. Alternatively, you can exit and take your child to a private school.

In Britain and in America, the super-rich have broken Hirschman’s law – they are at one and the same time exercising economic exit and political voice. They can have their tax-free cake and eat it……

Wednesday 16 April 2014

March 2014 complaint lodged with the Australian Stock Exchange concerning Metgasco Limited


Coal seam and tight gas exploration & mining company Metgasco Limited is listed on the Australian Stock Exchange (ASX).

An individual has lodged a 3-page complaint with ASX alleging that the company failed to meet its disclosure obligations and engaged in allegedly misleading and deceptive conduct (click on page images to enlarge):



The Australian Stock Exchange sent a 2-page reply in which it stated it was investigating the complaint in relation to the mining company's listing obligations:






Click on page images to enlarge


Note
The complainants address has been redacted from both letters for privacy reasons.
These digital copies of the complaint and response were received by North Coast Voices as a direct result of Metgasco Limited's release on 9 April 2014 of email addresses on its subscriber list.