Govt wants info on tax paid by multinationals
Revenue Minister Peter Dunne has asked for an urgent report on tax avoidance by multinationals.
Labour says companies such as Facebook are making fools of the Government and accuses Dunne of inaction.
Labour revenue spokesman David Clark said European governments and Australia were taking steps to close tax loopholes used by multinationals to shift profits to low-tax countries and the Government should join them.
Dunne said he had asked officials to report to him urgently on "both the implications for New Zealand of the steps other countries are taking, and also the options available to us here".
"I am expecting to receive that advice soon, and the Government will then consider what should be done," he said.
Clark said Facebook's meagre tax bill made "a mockery" of the Government. "Facebook only paid $14,497 tax in New Zealand last year. The year before it was $5238. For a company that has 2.2 million users in New Zealand and makes billions worldwide, that's barely believable."
Facebook appeared to be using an accounting technique called the "double Irish" to funnel income to Ireland and take advantage of its low 12.5 per cent corporate tax rate, he said. "I call that a rort."
He said the Government should follow Australia and Europe by bringing in laws to clamp down on such behaviour. "It's not just Facebook that funnels revenue through its low-tax Irish counterpart. Google New Zealand does it too."
Bloomberg put the spotlight on Google's tax affairs in 2010 when it reported that the internet search giant paid just 2.4 per cent tax on the billions it earned outside the United States.
- © Fairfax NZ News