14 DAY TRIAL // Microsoft, Google, and Apple are three of the big names involved in a new tax avoidance scandal in Australia, with local authorities now pushing for tougher laws that could bring severe financial penalties to companies turning to such schemes to dodge taxes.
Treasurer Joe Hockey said in a press conference in Canberra that there were several companies that were redirecting their profits in Australia to overseas offshores in order to avoid paying taxes, but he refused to provide any name involved in the investigations.
It’s believed that Microsoft, Google, and Apple are all part of the talks, as all confirmed in early 2015 that they were being investigated by the Australian Tax Office for their tax practices.
Reuters reports that Australia, along with other European countries such as the United Kingdom, is pushing for legislation that would allow members of G20 to access bank account information overseas and thus speed up investigation in tax dodging cases.
Huge fines for tax dodgers
But Australia is also trying to adopt new rules that would significantly increase fines for companies that turn to such practices, with Jockey pointing out that, starting January 1, companies turning to tax avoidance schemes could be fined with up to 100 percent of the amount of taxes they would have to pay to Australian authorities.
This isn’t the first time when Microsoft is accused of dodging taxes, and several other states started investigations against the software giant, including Luxembourg and Denmark. The United States itself also accused the Redmond-based software firm of using loopholes in the US tax code to avoid paying millions of dollars in taxes, but the company has always denied all allegations.
China was the only country that actually fined Microsoft for tax evasion, with the company getting a financial sanction of $137 million (€109 million) last year for channeling local sales through offshores based in Ireland, Singapore, and Puerto Rico, while also reporting losses to Chinese authorities for lower taxes. Microsoft claimed it recorded losses totaling 2 billion yuan ($325 million / €261 million) since 2008, while all profits where channeled to subsidiaries overseas.
Microsoft hasn’t yet offered a response on this new international crackdown on tax dodging, but we’ve contacted the company and will update the article when we get a statement.