KPMG: Australia Cannot Act Unilaterally On BEPS
Australia is well placed to leverage international work to tackle base erosion and profit shifting (BEPS), but cannot act unilaterally, Rosheen Garnon, KPMG’s National Managing Partner, Tax, has told the Senate inquiry on corporate tax avoidance.
“Our view is that there are fundamental changes that are going on with the global tax framework. Anything that we need to do in terms of changing our laws must use that as a reference. What we need is to understand where we are going to go with the global changes and to understand what impact that will have for the Australian tax base,” Garnon said during an April 9 hearing of the Senate Economics References Committee.
Garnon’s colleague, Grant Wardell-Johnson, Partner in Charge, KMPG Tax Centre, added that the Australian Government should wait until the Organisation for Economic Cooperation and Development publishes its next tranche of BEPS deliverables in September. “We need to stay in that pack so the changes we make are consistent with the changes that other countries are making,” he stressed.
Wardell-Johnson warned that, for instance, “jumping out of the fold with something like a diverted profits tax (DPT) is very dangerous.” He pointed out that the UK had introduced a DPT “for a very political purpose,” and cautioned that if Australia followed suit, other jurisdictions would too.
