News Corp CEO Julian Clarke rejects tax avoidance claim
Allegations that News Corp engaged in an aggressive tax avoidance scheme have been strongly rejected by the company.
News Corp Australia chief executive Julian Clarke said in a statement: “This claim is based on a fundamental misunderstanding of the nature of these transactions, US and Australian tax treaties and applicable Australian tax law.”
Despite a recent disclosure that showed News Corp’s local operations are incurring and paying substantial tax on its operations in Australia, the Fairfax Media story claimed News “siphoned off $4.5 billion in cash and shares from its Australian operation, virtually tax-free”.
The story was published after News laid bare the tax affairs of its local operations ahead of this week’s Senate inquiry into corporate tax avoidance.
In this submission, News Corp Australia revealed it had paid $417 million in corporate tax and withholding tax on accounting profits of $815.9m during a five-year period.
It has also paid $900m in goods and services, fringe benefits and payroll taxes.
“We expect these matters to be covered in more detail at the Senate Committee tax hearing in Sydney tomorrow” Mr Clarke said. The Inquiry was set up to focus on corporate tax avoidance schemes used by companies like Google and Apple.
Published in The Age and Sydney Morning Herald, the story is the latest in a series of claims in Fairfax papers roundly dismissed by News and corporate tax experts.
A story published in The Australian Financial Review alleged the Federal Court and the independent Australian Taxation Office plotted to give News Corp Australia a hand-out so big it blew a hole in the $400bn federal budget.
Yet, News Corp Australia’s tax statements show the company received a $623.8m reimbursement in 2014 for tax already paid by the company in respect of the 2001 to 2009 years.
“That report in The Australian Financial Review was just shocking,” Professor Sinclair Davidson, a professor in the School of Economics, Finance and Marketing at RMIT University said.
The inquiry comes as the federal government gets set to close a welter of loopholes used by overseas tech giants and other multinationals to minimise corporation tax bills.
In the May budget, Treasurer Joe Hockey will flesh out his plans to prevent big companies avoiding the taxman by routing profits generated in Australia offshore.
