Senior Australian Tax Adviser Wants Better International Regime

by Mary Swire, Tax-News.com, Hong Kong

28 August 2001

With shockwaves still reverberating in Australia after building materials firm James Hardie said it would shift its headquarters to the Netherlands because of its tax treaty with the US, Chris Jordan told the Sydney Institute in a speech last week that Australia's international taxation regime should be reformed as soon as possible to ensure more local companies did not relocate overseas.

Chris Jordan, who was chairman of the New Tax System Advisory Board and is now a member of the Board of Taxation which advises the Treasurer, wants changes to the way the foreign earnings of Australian companies are taxed and tax incentives - including a 10 per cent concessional rate - for foreign companies that base operations in Australia.

"There are no doubt areas of taxation that are in need of change, for example, our whole international tax regime, to ensure we can encourage multinational Australian companies to remain headquartered in Australia as well as ensuring we provide a reasonable tax environment for foreign companies seeking to invest into Australia. Our whole double tax treaty network should be revisited and renegotiated where appropriate. We need to start analysing what we can do now so we can make the changes in a year or so."

Mr Jordan, a senior partner at KPMG, also said more tax incentives were needed to encourage foreign companies to base their Asian operations in Australia: "There seems to be an ongoing reluctance to carve out identifiable operations and perhaps tax those operations at a 10 per cent concessional rate rather than the normal corporate rate of 30 per cent," he said.

Mr Jordan said that such measures would boost employment and create many opportunities for local businesses to provide goods and services: "We need to strive to create Australia as a country seen to be vibrant and welcoming and interested in encouraging new operations to commence."

Recommended