The Australian Tax Office (ATO) is reportedly looking at Deloitte, EY, KPMG and PwC for tax promoter schemes.
The investigation stems from the Paradise Papers, 13.4 million leaked confidential documents from legal firm Appleby, showing how major world players take advantage of offshore tax havens.
The ATO has been looking at thousands of emails and documents that were part of the Paradise Papers as they relate to Australia.
The tax office’s Tax Avoidance Taskforce has collected $5.6 billion over two years from its audits of global tech companies, miners and private wealth groups.
Now the ATO’s focus is on big accounting firms after the ATO allegedly found tax schemes to get around provisions of the Multinational Anti Avoidance Law.
“The ATO believes that companies are directing emails through lawyers which allows them to claim legal professional privilege and keep them from the tax office,” says the AFR.
Penalties for promoting a tax avoidance scheme include fines of up to $4.5 million.
A KPMG spokesperson said: “No such allegations have been raised by the ATO in relation to KPMG. KPMG has strong review processes designed to ensure that our advice complies with the Promoter Penalty laws.”
The documents from the Paradise Papers, published today on afr.com, detail how Swiss mining group Glencore moved $30 billion of assets into offshore tax structures after a $16 billion writedown by its Australian holding company.
The AFR says the Glencore restructure is now the subject of a major investigation by the ATO.
Glencore launched a High Court action two weeks ago to force the ATO to give up the emails and documents from law firm Appleby.
A spokesman for Glencore says the company is seeking an injunction against the Commissioner of Taxation from using these documents.
“The decision to commence proceedings follows multiple occasions on which Glencore has written to the ATO asserting privilege over and seeking the return of the documents,” the spokesman said.
“Legal professional privilege is a fundamental right that protects legal advice provided between lawyer and client. We, like anybody else, have the right to seek legal advice from our lawyers and for that advice to remain between lawyer and client.”
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