The Australian Taxation Office (ATO) has been scrutinizing the tax affairs of more than 200 multinational corporations for the past 18 months, and expects to litigate tax disputes arising from this activity beginning the second half of 2015, Andrew Mills, Second Commissioner at the Australian Taxation Office, said February 11.
Mills said that about 25 of the 200 client risk reviews involve tech companies or companies that operate digitally, and that about half of the reviews are complete.
So far, the ATO has commenced 20 audits where it has identified “significant concerns,” Mills said, speaking at the Australasian Tax Teachers’ Association 27th annual conference.
Mills said that the ATO is using its treaty and information sharing agreements to check the assertions MNEs make to the ATO against what they declare in other jurisdictions.
While the ATO expects that “some companies will accept that they need to contribute more tax in Australia without the need for litigation,” others are expected to go to court, he said.
“No doubt the world will be watching with interest to see the outcomes,” Mills said.
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