Powerful crossbenchers demand Facebook cough up
SENATE crossbenchers critical to Malcolm Turnbull's hopes of getting his corporate tax cuts into law say they want a crackdown on tech titans sending Australian sales revenue offshore and beyond the reach of the ATO.
It is estimated Facebook alone is transferring $1 billion a year of sales earned from Australian businesses to low-taxing Ireland and the US.
The Centre Alliance and Independent Tim Storer expect to see action from the government, possibly in the form of a digital services tax.
A DST is thought to be canvassed in a discussion paper soon to be released by Treasurer Scott Morrison.
Mr Morrison told News Corp Australia he has been working with overseas counterparts including in Europe - where a DST has strong support - "to see what we can do together to bring the digital economy into the global tax net".
University of Sydney tax expert Antony Ting said "a DST may be imposed at three per cent on the total revenue for Facebook - possibly including the amount not booked in the accounts of the local subsidiary - (but) derived from Australian customers."
The amount not being booked appears to be as much as 60 cents in every dollar of Australian sales.
Facebook argues it can send the money offshore because the customers booked ads online and didn't have direct dealings with its Sydney or Melbourne sales team.
Centre Alliance senator Rex Patrick told News Corp Australia it seemed inappropriate for money paid by Australians to target advertising at other Australians to be collected by an offshore entity when Facebook Australia operates here.
"Why would it not be collected by the local company?" Senator Patrick, whose party has two Senate votes, said.
"I will be putting questions to the Treasurer as to their knowledge of this particular practice and what mechanisms they have in place to ensure money collected by the foreign entity, but directly attributable to Australian activities, is properly subject to Australian taxation laws.
"I'll also be keeping a close eye out for the Treasurer's promised Digital Tax discussion paper which will no doubt seek to address these complexities," Senator Patrick said.
A spokesman for Senator Storer said "any action to ensure that multinationals - in particular the global tech giants - pay their fair share, he would support."
One Nation, which has two votes, is reportedly sympathetic to a DST. The party failed to respond to requests for comment yesterday.