Uber, Airbnb to be hauled before Senate inquiry into corporate tax avoidance
What does Uber mean for Canberra?
Journalist Henry Belot explains how Uber will work in the ACT and what it means for passengers and drivers.
Uber and Airbnb will be dragged before the Senate inquiry into corporate tax avoidance this week to face questions about tax structures that allow them to route profits through Netherlands and Ireland.
Uber and Airbnb have already made submissions to the inquiry arguing they comply with Australian tax laws, and claiming that their Australian operations merely provide support services to parent companies based in the Netherlands and Ireland respectively.
Labor senator Sam Dastyari, who was previously chairman of the inquiry (the new chair is Labor senator Chris Ketter) said both companies will be brought before the inquiry on Wednesday.
Just because these companies are innovative doesn’t mean we should allow them to have artificial structures designed to minimise their taxes
Labor Senator Sam Dastyari
Initially only Uber was scheduled to appear. Now both Uber and Airbnb will be subject to questions about their tax arrangements during Wednesday’s hearings in Sydney.
Executives from other multinationals including Chevron, ExxonMobil, Shell, Caltex, BP, Viva Energy, Woodside, Santos and Origin Energy will also appear at the hearings.
Tax Commisisoner Chris Jordan will also be asked to give evidence at the end of the day’s hearings. The commissioner has previously used the corporate tax avoidance inquiry to publicly challenge statements from multinationals including Apple, Google, Microsoft, BHP Billiton and Rio Tinto.
Senator Dastyari said in all the excitement about these new sharing economy services, people should not forget that these companies still need to pay tax.
“There’s a lot of buzzwords around at the moment in politics about disruptive technology and innovation,” Senator Dastyari said. “I’d also like to see us get back to the old-fashioned principle where companies actually pay their taxes in Australia.”
“Just because these companies are innovative doesn’t mean we should allow them to have artificial structures designed to minimise their taxes. And that’s precisely what we will be testing on Wednesday.”
In May, when he was communications minister, Prime Minister Malcolm Turnbull praised sharing economy services such as Uber as being part of the “agile” economy he envisages for Australia. He has also suggested Uber’s services are an “efficient use of unused inventory” that the Australian government can consider using.
Federal Labor has also backed calls for federal politicians, staffers and bureaucrats to be able to claim back Uber fares if they use the ride-sharing service for work.
Opposition Leader Bill Shorten has suggested “tailored, light-touch” national rules for the sharing economy and has said Labor is prepared to work with the Turnbull government on the issue.
The ACT government last month became the first to introduce regulation around ride-sharing but federally there are no regulations.
At the same time, Uber remains in a bitter stoush with the ATO on GST. The Silicon Valley technology giant has mounted a Federal Court challenge against the Tax Commissioner on the Australian Taxation Office’s decision to require Uber drivers to register for and pay GST.
Uber has dismissed Mr Jordan’s assertions that the company is playing dirty in order to win the media debate, and has said the ATO should not be allowing the taxi industry to help it develop guidance that ultimately affects sharing economy services like Uber and Airbnb.
But the ATO has said it’s given the same level of consultation to Uber in drafting its guidance. Mr Jordan told a Senate estimates hearing last month that Uber was making false statements and that the ATO may now start looking more closely at Uber’s tax affairs.
“If you were to have a company that was not transparent with us, and hadn’t co-operated particularly well with us, and in fact made publicly incorrect statements, that could impact our view of them,” Mr Jordan said.
Uber and Airbnb were contacted for comment, but had nothing further to add. In a submission to the inquiry Uber’s director of public policy Brad Kitschke said that Australia should work within the OECD framework rather than take unilateral action, noting that “almost every country in the world would like more tax revenue for their Treasury”.