Ikea, the Future Fund, Lend Lease, AMP and Macquarie Group are among dozens of Australian companies using elaborate, legal structures to cut their tax bills, leaked documents reveal

This article is more than 5 years old

This article is more than 5 years old

The largest ever leak of Luxembourg tax deals has exposed the complex schemes used by hundreds of Australian and international companies to drastically shrink their tax bills.



The Future Fund, Lend Lease, AMP and Macquarie Group are among dozens of Australian companies whose tax arrangements are revealed in nearly 28,000 pages of leaked documents, according to analysis by the Australian Financial Review.

The Australian arm of the furniture retailer Ikea paid less than 1% tax over the past 12 years, the AFR reported.

Ikea’s Australian stores turned over $4.76bn between 2002 and 2013. But they paid $2.67bn in supply fees to another independent Ikea entity, and a further $904m to other Ikea companies in Luxembourg and the Netherlands.

The arrangement allowed the Swedish furniture giant to declare a pre-tax profit of $103m, on which it paid just $31m in tax – while its sales surged 500%.

Investigation of the documents has been led by the Washington-based International Consortium of Investigative Journalists. The documents, showing extensive use of shell companies, hybrid debt structures, internal loans and royalty payments, are available on its website.

The documents include details of a deal struck in 2010 between the Future Fund and Luxembourg that appears to limit income tax on trades in specific distressed debts on a $500m European portfolio to just $136,000 a year.

A management buyout deal negotiated for Lend Lease in 2003 by the accounting firm PriceWaterhouseCoopers saw lucrative management fees routed from Luxembourg through Bermuda and subcontracted back to Europe, cutting the tax rate on these payments to less than 3%.

Lend Lease was bought out of the business by Macquarie Group, which sold its 56% stake to the American funds manager BlackRock last year. Both Australian companies said they comply with domestic and international tax laws.

The secret tax arrangements of many of the world’s largest companies are contained in the leak, including Pepsi, AIG, Coach and Deutsche Bank. The documents show one Luxembourg address, 5 rue Guillame Kroll, is registered to more than 1,600 businesses.

Schemes such as these are legal, but their exposure will build momentum for a crackdown on global tax avoidance at this month’s G20 meeting in Brisbane.

The treasurer, Joe Hockey, has labelled “tax cheats” thieves and already agreed to increase transparency and crack down on profit shifting by having tax authorities share more information across borders.

But Labor said the government rejected measures that would prevent an additional $1.1bn being sent offshore, and cut more than $180m from the Australian Tax Office’s staff budget.

Tax minimisation strategies employed by Australia’s largest companies cost the federal government more than $8bn in revenue a year, a report by the union United Voice and the Tax Justice Network found.

Oxfam estimated similar techniques deprived developing nations of $114bn a year.

Dr Mark Zirnsak, who runs the Australian branch of the Tax Justice Network, said the new revelations vindicated many of the concerns it had been raising and “add absolute weight to Australia taking a real lead on cracking down on this sort of tax avoidance”.