How are multi-national corporations operating in Australia reacting to greater tax transparency?

Presented by ANU College of Asia & the Pacific

In the aftermath of the Global Financial Crisis, the G20 mandated the OECD address the problem of aggressive tax planning by multi-national corporations (MNCs) through, amongst other approaches, greater tax transparency. The idea is that better visibility into MNCs' tax structuring would be the solution to corporate tax-aggressiveness which has been described as a "perfect plague".

Governments, the OECD, and tax authorities foresee that greater tax transparency would induce a culture shift in corporate tax behaviour so that MNCs abandon their anti-social tax practices and start paying their fair share of tax in jurisdictions where they operate - that's the ideal for tax activist campaigners.

These days, however, MNCs appear to have little truck with the social contract, with the social license having become all-important. Furthermore, despite tax shaming, US-based digital MNCs with iconic brands that inspire cult-like consumer loyalty have shown that they're quite reputationally resilient. The million-dollar question is, therefore, whether greater tax transparency would really be able to bridle MNCs that have been described as "the global grandmasters of tax avoidance schemes"?

This seminar is Johan's final presentation of his doctoral candidature.

About the Speaker

As member of the 2017 RegNet PhD cohort, Johan van der Walt's research examines how MNCs operating in Australia are responding to the shift to greater tax transparency. The crux of the qualitative research is to determine whether, and to what extent, tax transparency might be reining in MNCs' aggressive tax planning in the aftermath of the Global Financial Crisis - which exposed just how MNCs had been exploiting the international tax system's dysfunctionality.

The research involved multiple 'elite' interviewees, both internationally (e.g. the OECD) and in Australia (e.g. The Treasury, ATO, tax partners at the 'Big Four' accounting firms, prominent Australian tax barristers, board directors, executives from tax activist organisations, etc), and builds on the ground-breaking work undertaken at the Centre for Tax System Integrity (CTSI), Valerie Braithwaite, Director of the CTSI from 1989 - 2005. Valerie acts as Johan's lead supervisor, with John Braithwaite and former ATO Commissioner, Mr. Michael D'Ascenzo AO the other supervisors on the panel.

Having graduated in law, Johan subsequently worked at the South African tax authority and then went over to 'the dark side' by going into private practice, first with a large commercial law firm and afterwards launching the Tax Controversy practice of a Big Four accounting firm. In contrast to his pre-RegNet work (which focussed primarily on the tax-technical) Johan's tax transparency research has a strong regulatory perspective.

Image credit: Timothy Krauser from flickr (CC BY 2.0)

This event will be delivered online via Zoom.