In the wake of a Fairfax report into high level tax avoidance by major companies in Australia, the Senate has voted to establish an inquiry into the alleged dealings.
According to the investigation, companies such as 21st Century Fox, BHP, Rio Tinto, and both the Commonwealth Bank and NAB avoiding paying millions in tax.
It is estimated that up to $80 billion in tax payments may have been avoided by the ASX 200 alone.
In yesterday’s Senate meeting Christine Milne tabled the push for an inquiry and the introduction of new “legislation that requires Australian corporations to disclose all foreign subsidiaries in their financial statements”.
“Of Australia’s largest 200 companies, 29 per cent have an effective tax rate of 10 per cent or less, and 14 per cent have an effective tax rate of zero per cent,” Milne stated.
She went on to call on the Government “to act on corporate tax evasion in Australia immediately, rather than unnecessarily waiting for the G20 in November 2014”.
The upcoming G20 meeting has declared offshore tax evasion as one of its major points of focus.
At the time of the announcement of the symposium earlier this year, treasurer Joe Hockey stated the gathered members would work towards greater corporate transparency and slashing the opportunities for tax evasion.
''Some global companies aren't paying their fair share of tax anywhere,'' Hockey said.
''We want a global response. We expressed our continued full support for the G20 OECD action plan and I am pleased to say this work is on track for delivery at the Brisbane summit at the end of this year .The globe needs to know who is paying tax where.''
Milne made motion to bring the recent tax evasion matter before the Economics Reference Committee for June next year, which passed by a slim margin of 34 to 28.
This is not the first time that major companies have come under the spotlight for alleged tax evasion.
Earlier this year Glencore was accused of failing to pay tax in Australia for three years straight.
According to an article in The Age, the miner “reduced its tax exposure by taking large, unnecessarily expensive loans from its associates overseas", its author Michael West writes.
“At up to 9 per cent, the interest rates on these $3.4 billion in loans were double what the company would have had to pay had it simply borrowed the money from the bank.”
The piece goes on to say the miner carried out profit-shifting within the company, which is a clear breach of the Income Tax Assessment Act.
'”The truth is that Glencore Coal Investments Australia's operations in Australia are, because of the Group's business model, branch operations of the Swiss-domiciled parent entity, which uses the now dormant legal shell of an Australian body corporate in an attempt to hide the reality of its branch business in Australia,” an independent report carried out as part of the article’s investigation said.
At the time a Glencore spokesperson told Australian Mining that “the claims we have paid no income tax over the last three years is preposterous”.
“Glencore complies with all tax rules and regulations in Australia and in each jurisdiction where we operate,” the miner said in an official statement.