Australia Proposes Tax Test for Foreign Takeovers
The global initiative to crack down on corporate tax avoidance is set to play a role in Australia’s assessment process of takeover proposals of local firms by overseas competitors, according to national daily
The Australian
.
The paper reports that the new hurdle in the regulatory clearance process will see the treasurer of Australia consider a suitor’s tax history in the country before giving any deal the green light.
Current treasurer Joe Hockey is behind the move as Australia’s new government under Tony Abbott looks to shore up revenues and minimise the risk of corporate profit-shifting.
“If you’re advised that an Australian company is a major taxpayer and if it is purchased by someone overseas and therefore its tax liability would be reduced domestically to zero, that feeds into a decision about what is contrary to the national interest,” Hockey told
The Australian
.
“You’d lose potentially a substantial lick of revenue. And that does have an impact on the national interest.”
His comments come in the wake of last weekend’s Group of 20 (G20) finance ministers’ summit in Sydney where the world’s leading economies discussed plans to tackle global tax avoidance.
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