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New Australian Tax Commissioner Outlines Stance

by Mary Swire,, Hong Kong

18 March 2013

Australia's new Tax Commissioner has said that he will direct his officers to make full use of the compliance "toolkit" available to them to discourage inappropriate practices by multinational corporations.

Addressing a Tax Institute convention, Chris Jordan outlined his priorities for steering the work of the Australian Tax Office (ATO). Speaking of his approach to the design of the tax system, Jordan said that part of his role is to ensure that businesses operate within the law. He stressed: "I want businesses to clearly know, if they choose questionable or very aggressive practices there will be consequences," adding that he does not regard it as legitimate for "international businesses to be left alone to adopt very aggressive structures."

Going forward, Jordan believes that the ATO can contribute to and inform the ongoing international discussion of tax avoidance, given its background in case-work and knowledge of how legislation "plays out in practice." The ATO will also "contribute by supporting Treasury and the specialist reference group on multinational corporate taxation," with Jordan describing the group as "an important initiative which will tap into knowledge of key industry stakeholders on the issues and risks." Jordan will personally "look to taking an active role by working with key jurisdictions such as the UK, the US, and Germany to improve our understanding of key risks ... and how we can collectively bring new ideas."

Concluding his speech, Jordan said that he wants "to drive change to directly improve the tax system and the ATO's performance."

The group to which Jordan referred held its first meeting in February, and was set up by the Government to examine the tax minimization strategies employed by multinationals. Its chairman, Rob Heferen, has been asked by Assistant Treasurer David Bradbury to begin work on a scoping paper, which will "set out the risks to the sustainability of Australia's corporate tax base" from such behavior. The Government also unveiled reforms last month to counter schemes that comply with the technical requirements of the law but which, when viewed objectively, are conducted mainly to avoid tax.

TAGS: compliance | tax | business | tax avoidance | law | Australia | multinationals | legislation

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