A spokeswoman for Australia’s Assistant Treasurer Arthur Sinodinos has indicated that tax-base erosion and profit shifting will be a key focus of the G20 during Australia’s Presidency.
In this connection, speaking before he left for this week’s Davos conference, Australian Prime Minister Tony Abbott said “We want to … try to ensure we have less leaky national taxation systems”.
Commentators have variously encouraged the Prime Minister to push for the publication of taxable incomes of transnational companies by local tax authorities, seek a global solution to the perceived problem and to work within the OECD tax treaty framework to achieve a consistent outcome.
The source shifting strategies of companies such as Google, Apple and Amazon are again being quoted as prominent examples of unacceptable tax practices. The rapid development of online trading involving both ‘cloud’ delivery of software products and physical product delivery by courier from tax and duty free warehouses located outside the customer’s country, has provided transnational enterprises with significant opportunities to manipulate the legal source of their cross border trading incomes.