Treasurer Joe Hockey is stepping up his war on foreign companies not paying tax on Australian produced profits and has asked the Australian Tax Office (ATO) to look at “location specific profits” according to the AFR.
He is specifically targetting the 9 percent premium that Apple charges for the iPhone 6 in Australia relative to the same phone in the US. Australian buyers pay between $68 and $82 before GST than buyers in the US.
There are a myriad of aspects which can drive the difference in price – not least of which is an Aussie dollar now at 87 cents – but Hockey wants the ATO to investigate to see if “location specific profits [are]being generated and then shifted out of Australia”.
It’s a hot button topic with an “Australia tax” seemingly charged by many technology products which can be sourced far cheaper from websites in the US – even currency adjusted – for buyers who can get around the geo-blocking.
“Australian consumers often pay much higher prices compared with US consumers for identical IT hardware, software, music, games, sporting equipment and fashion,” Hockey said.
Indeed we do.
This news just a day after it was revealed that many of Australia’s listed companies are paying 10% company tax or less it seems that the Treasurer needs to look hard at the collection of taxes in Australia if he wants to maximise his fiscal strength.
You can read more here