The tax commissioner, Chris Jordan, says he has run out of patience with multinational companies using “over the top excuses” to “string along” the tax department and “game the system”, promising more legal action and a “much harder stance” to force them to pay tax in Australia.



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“The excuses we hear from these companies are, frankly, over the top,” he told a Senate estimates committee, acknowledging he was responding to the deep public concern about multinational tax avoidance.

“How is it possible that companies known for their new-age technology, and innovative products and services, fail to be able to furnish us with basic reports showing their business structures, their profits, how much tax they’ve paid and where?

“Their clear tactic is to delay and obstruct. They game the system. They even have the gall to complain that we are uncooperative and unreasonable simply because we don’t agree with them or their advisers on what are, at times, quite outlandish claims.”

Jordan said the companies had strung the tax department along.

“Enough is enough,” he said. “No more. We will be reasonable with those that genuinely cooperate, but we will now take a much harder stance on those who do not. We will not be rolling over and giving further extensions of time.

“We are ruling the line under these protracted negotiations and proceeding immediately to raise assessments and create liabilities on these cases – potentially taking them all the way to court if necessary.”



The Tax Office has run successful court cases against tax practices of companies including Orica and Chevron, and remains in dispute with many more, but examples of aggressive tax minimisation continue to emerge, including most recently that McDonalds managed halve its tax bill in 2014 by routing payments through Singapore. The Chevron judgement is under appeal.

Last year the government passed new anti-tax avoidance tax laws, applying from last month, which affect 1,000 companies with over $1bn revenue. But tax advisors said publicly their clients would rather pay non disclosure penalties than open their books.

Saying he had run out of patience with such delaying tactics, including companies claiming all the necessary paperwork on their tax affairs was housed in overseas parent offices, Jordan said the Tax Office would now simply issue them with Australian tax bills – effectively reversing the onus of proof and forcing the companies to produce any evidence in order to argue their case in Australian courts.

“They say they do not keep the documents here ... we can’t turn up in New York and enter and seize ... we are told the documents are not here, they are held by the parent, we ask for them and we don’t get them,” Jordan said, concurring with Labor senator Sam Dastyari when asked “so you are saying rather than constantly waiting for the documents to appear ... you will be effectively sending a tax bill and saying if you want to dispute this go to court?”

In his statement to the estimates committee, Jordan said 26 companies had been warned over “operate here and bill overseas” business models, and the tax office has now approved letters to another 60 companies to issue more such warnings.

“There will be more put on notice in the coming months, as we work our way through the pool of taxpayers who have an ‘operate here and bill overseas’ business model,” he said.

“My message to companies operating in Australia is clear – you must pay your fair share of tax on the profits you earn here. There is no getting around it, there are no exceptions to be made, and there is no weakness in our resolve to administer the tax system.”

“Where these companies do not voluntarily comply with the new law, we will be commencing immediate reviews and audits – these are non-negotiable. We will not be rolling over and giving further extensions of time. We are ruling the line under these protracted negotiations and proceeding immediately to raise assessments and create liabilities on these cases – potentially taking them all the way to court if necessary,” he said.

Dastyari – who has presided over a separate Senate inquiry into tax avoidance by multinationals – said Jordan’s comments showed the Tax Office was “getting the message” about how angry people were about the issue.

Mark Zirnsak, of the Tax Justice Network, said it was good to hear that the Tax Office was intending stronger enforcement of existing tax laws, but there were still legal loopholes that could be changed, including to limit the ability of companies to shift profit to low tax jurisdictions.