Australia’s largest banking and finance
institutions have defended their corporate tax affairs and have rejected
claims the tax system is “fundamentally flawed”, in submissions to a
Senate inquiry.
On Monday an international investigation exposed how the Swiss arm of
the HSBC bank helped wealthy clients dodge taxes around the world.
Leaked files revealed that hundreds of prominent Australians held HSBC
Swiss accounts.
The Senate inquiry will examine the adequacy of corporate tax laws
and the effectiveness of the Australian Tax Office (ATO). It was
launched before the HSBC reports were published, in response to a report
from the Tax Justice Network that said scores of Australian companies
were minimising tax liabilities.
So far more than 70 organisations have lodged submissions, with many corporations defending their tax practices.
The ANZ bank disputed the findings of the Tax Justice Network report, and said it was “concerned by the current debate”.
“The report suggests ANZ, among others, has underpaid its Australian
corporate tax liabilities. As this submission will demonstrate, ANZ has
paid, and continues to pay, its Australian tax liabilities in full in
accordance with the tax laws,” it said.
Macquarie Group, which includes Macquarie Bank, said: “With regard to
Australia’s tax system, it should be noted that in addition to the
taxation requirements of offshore countries, Macquarie also adheres to
Australia’s controlled foreign company tax provisions so that income
generated in countries regarded as not having a comparable corporate tax
system is treated as Australian taxable income and is taxed at the
Australian rate.”
AMP acknowledged that it used offshore entities, and chose locations based on a range of factors.
“The selection of a particular location requires balancing various
commercial, legal, investor and cost (including tax) factors. Commonly
used fund locations include Luxembourg, which is the second largest fund
centre in the world (only the USA is larger),” its submission said.
The submission said the company “does not shift to, or accumulate
profits in low/zero tax jurisdictions” and “does not use the secrecy
rules of jurisdictions to hide income/assets”.
The Corporate Tax Association – which represents more than 100
companies, including the Commonwealth, ANZ, NAB and HSBC Australia banks
– said it “objected to views that paint a picture that the Australian
corporate tax system is fundamentally flawed and that corporate
taxpayers in Australia are inappropriately minimising their tax bill”.
But it acknowledged the importance of transparency, and said it had
been encouraging its members to “provide more useful and concise
information about their own tax performance”.
Each banking body was asked to provide information on the effective tax rate it paid.
ANZ did not do so, saying the tax rate “was a result, not a target”.
AMP said its rate was 23.3% in the year to 31 December 2013. It noted
that was “lower than the general corporate tax rate of 30%”.
“This results from intended government tax policy and/or accounting
rules. All treatments and adjustments are perfectly legitimate and not
as a result of aggressive tax planning.”
Macquarie Group said its effective tax rate was “has been 38% or higher for each of the last four reporting periods”.
Public hearings will be held in the next few months, with the committee due to report by June.
This news story is reprinted from www.theguardian.com
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