The ATO and tax authorities all over the world are cracking down on companies and jurisdictions which allow profits to be moved and tax avoided from the country of operations.
This morning the AFR reports that there has been a massive leak of documents from Price Waterhouse Coopers (PWC) Luxembourg office about the tax tactics of companies from all over the world.
These documents include Australian companies and fund managers and companies operating within Australia.
IKEA appears to be a heavy avoider of tax, based on the reports, with the AFR saying the Swedish Furniture maker’s Australian arm has earned around “$1 billion in profits since 2003, and almost all of it has been exported tax-free to Luxembourg and the Netherlands.”
The way that this occurs is fairly straight forward with the local Australian arm being charged “franchise fees, interest payments and fees.”
It’s not an uncommon arrangement for IKEA however with the documents purporting to show similar arrangement for the European operations and the founder of the firm.
But it’s not just IKEA under the spotlight from the leaked documents with a number of well known Australian firms including AMP, the Future Fund, Macquarie and Lend Lease mentioned in dispatches.
Australian companies aren’t special though and the documents show that there are a wide range of global players across a large number of industries ranging from energy, finance, food, health and manufacturing, to media, retail, tech and travel.
In the end it means that tax Commissioner Chris Jordan and his staff have some investigating to do and no doubt where they can they will seek to recoup these taxes avoided and charge any fines.
You can read more here.
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