Britain has thrown down the gauntlet to multinational tax cheats, with experts closely watching to see if Australia follows suit.
Treasurer Joe Hockey has been in talks with the UK government over a new 25 per cent levy largely aimed at a number of technology firms seeking to avoid tax.
“(We) will have more to say on this soon,” he told AAP on Thursday.
The “Google tax” announced by British Chancellor of the Exchequer George Osborne on Wednesday will be imposed from April on the profits generated by multinationals in the UK, which until now have been artificially shifted out of the country.
“That’s not fair to other British firms. It’s not fair to the British people either. Today we’re putting a stop to it,” Mr Osborne said in his Autumn Statement or budget update.
Michael Croker, of Chartered Accountants Australia and New Zealand, said there would be some concern over the UK’s decision by those who have been patiently working with the Organisation for Economic Co-operation and Development to counter tax evasion.
The OECD, through the G20, is working on its base erosion and profit shifting project, the so-called BEPS.
Mr Croker said until now all countries have been working together in the “BEPS cart”.
“The fear being that a country which takes unilateral action raises the spectre of double taxation with nations sparring over the same tax base,” he said.
“There will be a great deal of interest whether the Australian government follows suit.”
Mr Hockey said the federal government will continue to work closely with its international colleagues in strengthening the integrity of global tax systems.
“When multinationals divert profits overseas to avoid tax, they are effectively cheating other taxpayers who pay their fair share,” he said.
The treasurer will be updating the government’s financial accounts in the next couple of weeks, a budget that has been hit by declining revenues.
Shadow assistant treasurer Andrew Leigh said the UK had taken an interesting approach to tackling a global tax challenge and he will be watching how the new tax works in practice.
“Australia already has strong anti-avoidance rules in our current tax law,” Dr Leigh told AAP.
“So Joe Hockey needs to clarify how this would interact with those existing rules (should he implement something similar here),” Dr Leigh told AAP.