News Corp receives $882m rebate
AN $882M TAX REBATE received by Rupert Murdoch’s (pictured) News Corporation from Australia is set to reignite the debate over how much tax is paid by international corporations.
The reliefs were related to a $2bn (£1.2bn) claim for historic losses made on currency transactions made by its Australian subsidiaries, a disclosure made in the US revealed. The payment was originally expected to be in the region of $600m, but grew to $882m after interest.
The Australian tax authority wanted to challenge the claim, but was overruled by the Federal Court of Appeal in July last year, the Australian Financial Review reported on Monday. The decision not to appeal came in the build-up to the federal election, with News Corp’s Australian titles attacking the country’s then-Labor government.
“All decisions on whether to appeal a court decision are made by senior technical officers. Careful consideration is given to a range of factors, including the costs to all parties of proceeding and the importance of the particular case to clarifying the law for the benefit of the wider community,” an ATO spokesman told the Guardian.
Although the losses date back as far as 1989, the refund was paid to Murdoch’s newly-created 21st Century Fox under the terms of the empire’s split last year, News Corp’s accounts aid.
The taxation of multinational companies has been a major source of controversy after it emerged discrepancies between nations’ tax rules allow companies to shift profits to low-tax jurisdictions.
In the UK, companies including Google, Amazon and Starbucks have been in the firing line in both the media and parliament for their use of offshore jurisdictions to drive down their tax liabilities.
In a Public Accounts Committee hearing in November 2012, committee chair Margaret Hodge branded their practices “immoral”, and in a more recent hearing described Google as “evil”, in reference to the company’s mantra “don’t be evil”.
The OECD has spent recent years working on a solution to what it calls base erosion and profit-shifting, through which multinational companies can locate activities in tax regimes that suit them best.
The body’s action plan attempts to address the digital economy, which it has said offers a borderless world of products and services that too often fall outside the tax regime of any specific country, leaving loopholes that allow profits to go untaxed.
Last year, at the request of the G20, the OECD identified 15 steps governments need to take to tackle tax base erosion and profit-shifting.