The investigations come as Australia’s Federal Government works to close the loopholes that have previously allowed large multinational companies such as Apple and Google to legally minimise the rate of tax they are required to pay in the local market.
In March, for example, the Federal Government’s so-called “Google Tax” was passed into law, with the new legislation aimed at targeting profit-shifting among multinational enterprises.
The Diverted Profits Tax Bill 2017 and the Treasury Laws Amendment (Combating Multinational Tax Avoidance) Bill 2017 were introduced into Parliament by Treasurer, Scott Morrison, in February.
The introduction and passing of the laws came after a lengthy Parliamentary inquiry into corporate tax avoidance, during which some of the biggest tech players in the local market fronted up to the Senate Economics References Committee-led inquiry.
Among those under scrutiny were Apple, Microsoft, IBM and Google, all of which have been on the Government’s radar in relation to their local tax practices.
Ultimately, the new laws see some companies that book their profits in international regions that claim a lower tax rate than Australia’s standard 30 per cent company rate slugged with a tax bill based on a rate of 40 per cent.
Additionally, in June, Australia signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting agreement at an event hosted by the Organisation for Economic Cooperation and Development (OECD) in Paris on 7 June along with 67 other countries.
Without such a deal, Australia would have to introduce the new rules treaty by treaty, a process that the Government said could take decades.
Some of the legislative initiatives taken by the Government have made an impact, with Microsoft revealing in August it had reached a new tax arrangement with the ATO, albeit on the very same day it fronted up to a public hearing for the Government's inquiry into Corporate Tax Avoidance on 22 August.
However, in August, it was revealed that the new laws introduced by the Federal Government to crack down on tax avoidance by large multinational companies had resulted in little or no change to the local operations of Apple.
Apple's managing director for Australia and New Zealand, Tony King, revealed earlier this year that since the introduction of the new laws in Australia aimed specifically at reducing tax avoidance practices, Apple has made practically no changes to its business model in Australia.
“As new tax laws have come into effect in Australia, like the Multinational Tax law, Apple has not needed to make any changes to our business model, which was and remains compliant,” King told Committee members of Parliament at a public hearing on 22 August. “As financial reporting and tax transparency measures evolve, Apple is fully adopting these measures.”