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Opinion piece: Who is really to blame for base erosion?
Published on 01 May 13 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
Recently, we have seen comments from government and other sources about multinationals who are said to “shirk” the obligation to pay their “fair share of tax” in the context of press reports about multinational IT companies and how little Australian tax they pay on profits from sales to Australians. The underlying problem is base erosion, that is, reduction of Australia’s tax base by citizens dealing directly with overseas suppliers, who do not pay Australian tax the way their domestic competitors do.
This is not new; legislators and administrators have known of the problem, and possible solutions, for a long time. However, we seem to be witnessing a pattern of careful demonisation of taxpayers, whereas the real problem, in the author’s opinion, is lack of results from those responsible, including ministers from both sides of politics, for administration of the tax system over the last 15 years.
Author profile
Paul McNab CTA
Paul McNab, CTA, is the Principal of McNab Tax Lawyers and has more than 30 years of taxation experience. Prior to starting McNab Tax Lawyers, Paul was a tax partner and DLA Piper and was a leading partner in the Tax Controversy group of a ‘Big 4’ accounting firm where he also led the Australian firm Technology, Media and Telecommunications (TMT) sector practice for 4 years. In recent years he has provided extensive advice to multinationals changing their business structures in response to the commercial forces of globalisation and the BEPS initiatives prompted by the OECD. Paul has consulted to multinationals across a range of sectors and transactions and has litigated taxation matters in the state and federal courts, including the High Court of Australia.
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28 May 2024
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