Australia

Details

  • Service: Tax, Corporate Tax, Topics, Base Erosion and Profit Shifting
  • Type: Regulatory update
  • Date: 9/09/2013

Tax Insights

KPMG's analysis of tax issues and developments.

Grant Wardell-Johnson

Grant Wardell-Johnson
Leader, Australian Tax Centre

+61 2 9335 7128

gwardelljohn@kpmg.com.au

Facing the Challenge of Base Erosion and Profit Shifting 

by Grant Wardell-Johnson, Australian Tax Centre

One of the many challenges facing the incoming Coalition Government will be addressing the growing international issue of tax base erosion and profit shifting, otherwise known as BEPS. Australia will be hosting the G20 in 2014, which will provide a golden opportunity to set the agenda on BEPS. While in opposition, the Coalition expressed their commitment to addressing this issue, and emphasised the need for appropriate industry consultation.

The international BEPS debate has arisen at this time due to a confluence of five powerful streams that have created a river of discussion:

 

  • Governments facing reduced revenue and increased demand for expenditure in the wake of the global financial crisis (GFC)
  • the rise of Corporate Social Responsibility (CSR), and the public feeling that businesses have a responsibility to contribute to the communities and societies in which they operate
  • media focus on tax issues such as the recent focus on the amount of tax that large multinational companies such as Apple and Google pay in various jurisdictions
  • the increasing internationalisation of business, meaning that large swathes of activity can occur in neither the companies’ home country nor where the customers are located
  • the increasing role of the internet in commerce, meaning that sellers do not need a physical presence where the transaction is initiated.


David Linke and I have made a series of videos in which we discuss these and other issues relating to the BEPS debate.

 

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