According to Fairfax Media, Australia’s Treasury department has released a report admitting there is very little it can do to stop big multi-nationals from (legally) avoiding tax.
Since the rules that allow big companies to shift profits are entrenched parts of the tax system, and also use other countries’ laws, Australia instead needs to focus on working with other OECD countries to change the rules.
“There are some actions Australia can and has taken unilaterally; these are primarily focused on improvements than can be made without significant divergence from international tax settings,” Treasury said, according to Fairfax Media.
“But the key focus of Australia’s efforts should be working multilaterally through international organisations to modernise international tax rules.”
Apple and Google are two companies that are often said to use legal structures to avoid paying tax, by shifting profits between countries.
According to Fairfax, Google’s Australian arm paid just $74,000 in tax in 2011 despite estimates of its revenue from Australian ads reaching $2 billion.
Read more here.
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