Massive perk Labor wants to axe
IT'S one of the sweetest perks in the high-stakes tax minimisation game, and Labor today is promising to end it.
The pledge is contained in a raft of measures Labor says would add $4.8 million to tax revenue over 10 years by targeting the practices of multinationals and wealthy individuals.
One of the practices it is taking aim at involves companies and individuals who use overseas tax havens.
They reduce their Australian payments by using the off-shore facilities, but that's not the only saving they make.
They can claim an Australian tax deduct for the expense in going overseas to inspect their accounts.
Labor has pledge to scrap the deduction to ensure multinationals pay their own way.
The Opposition is announcing them today including big cash rewards for those who dob in rorters and a halt to "citizenship shopping" to live here but pay a lower tax rate elsewhere.
It also says that in government it would issue detailed public reports of how much tax is paid globally by big companies, with in a bid to embarrass those which manage to pay little anywhere.
"Working Australians pay their taxes - it's only fair that multinationals pay their fair share too," Labor will argue.
"Labor will also close a loophole that allows companies to deduct bad debt from related party financing arrangements."
The tax proposals released today include:
• An increase in penalties for individuals and entities promoting tax evasion and avoidance;
• A crack-down on citizenship shopping by requiring all individual Australian taxpayers to notify and declare to the Australian Taxation Office if they have residency or citizenship of any other jurisdiction and the name of that jurisdiction;
Introduction of public reporting of country-by-country reports, ensuring the release of high-level tax information about where and how much tax was paid by large corporations ;
• Provide protection for whistleblowers who report on entities evading tax to the Australian Taxation Office and, where whistleblowers' information results in more tax being paid, allow them to collect a share of the tax penalty (a reward of up to $250,000).
• Introduction of a publicly accessible registry of the beneficial ownership of Australian listed companies and trusts, allowing the public to find out who really owns our firms.
• Introduction of mandatory shareholder reporting of tax haven exposure, requiring companies to disclose to shareholders as a 'Material Tax Risk' if the company is doing business in a tax haven.
• Appointment of a community sector representative to the Board of Taxation to ensure community sector voices are heard in tax design and review processes.