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Law, morality and multinationals

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Published on 01 Apr 17 by "THE TAX SPECIALIST" JOURNAL ARTICLE

The rising political pressure against multinational enterprises (MNEs) that seek to minimise tax liabilities is a global phenomenon. In Australia, even fiscally conservative politicians have been caught up in the populist wave and have introduced a new diverted profits tax (DPT) to bolster the country’s already strong anti-avoidance and transfer pricing rules. This article examines the OECD’s series of actions to prevent MNEs from artificially shifting profits to low or no-tax locations and analyses the “arm’s-length” principle in the Apple Inc case. The author questions why a DPT is necessary when the combination of Pt IVA, the multinational anti-avoidance law and Div 815 ITAA97 leave few gaps in the ATO’s arsenal to deal with tax avoidance behaviour by MNEs. The author also argues that the DPT will only take the broad discretion of the ATO into unchartered waters.

Author profile

Richard GELSKI
Richard is a former President of The Tax Institute and a tax lawyer with over 40 years experience in the areas of taxation, corporate and commercial law. He has particular experience in corporate structuring, cross-border investment, tax-effective financing, capital raising, mergers and acquisitions and property trust structures. Richard regularly advises public and private companies in respect of their tax affairs. He advises multinational groups in respect of their Australian operations as well as their appearances at Senate Committee hearings. He also sits on the boards of a number of public and private charitable foundations.
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