Australia Extends Tax Avoidance Inquiry to Probe ExxonMobil

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By Peter Hill

Australia’s lawmakers confirmed Dec. 5 they will extend a long-running inquiry into corporate tax avoidance, to May 30, 2018, following trade union allegations that global gas company ExxonMobil Australia Pty Ltd. paid zero corporate tax on A$18 billion ($13.7 billion) in revenue.

The Economics References Committee had been scheduled to present its final report to parliament Dec. 6. The committee changed its schedule after three trade unions jointly released documents with the allegations Dec. 4, during a trade union rally in Canberra and to parliament members, also calling in their “Make Exxon Pay” campaign for the inquiry to be extended.

Union delegates earlier held a meeting with the chairperson of the Senate committee’s inquiry, Senator Chris Ketter, who sent them a message on Facebook Dec. 3, thanking the unions “for meeting with me about ExxonMobil dodging corporate tax responsibilities in Australia, despite raking in $18 billion in revenue.”

In the unions’ documents—seen by Bloomberg Tax—Australia’s Electrical Trades Union, the Australian Workers’ Union, and the Australian Manufacturing Workers’ Union claim that ExxonMobil Australia Pty Ltd “hid” its ownership structure through the Bahamas and the Netherlands from the Senate inquiry.

The unions also said that Exxon filings in the U.S. “reveal that the multinational has $54 billion stashed in offshore tax havens” and that the Australian Tax Office “has not approved Exxon’s tax filings for a decade.”

Senator to Dig Deeper

Senator Ketter told Bloomberg Tax in an email Dec. 6 that “claims that Exxon is not paying corporate tax in Australia and reports that the ATO has not approved Exxon’s tax filings for over a decade are troubling.”

“I want to get to the bottom of these allegations,” Ketter said.

He told Bloomberg Tax that the committee “also agreed to write to stakeholders, including Exxon, seeking supplementary submissions and to consider if further hearings should be organised.”

The unions also reference the company’s debt repayments of A$1.2 billion in 2016, which they say “relate to more than A$18.5 billion in offshore related party loans.”

Anti-Avoidance Campaigners

The Exxon allegations stem from a report Tax Justice Network’s Jason Ward, on Exxon’s Australian tax affairs, set for publication Dec. 8.

In an interview Dec 6, Ward told Bloomberg this would coincide with the release by the ATO of its latest data set of taxable incomes and tax payable by all Australian public and foreign-owned companies with total income of A$100 million or more, including Exxon. Ward’s report relied in part on earlier data sets previously released by the ATO.

ExxonMobil Australia Pty Ltd didn’t response to a request for comment.

In a “Tax Facts” document on its website, the company stated that in 2016 it “experienced a corporate income tax loss in its annual accounts.”

Exxon also said in the document that the company “receives ongoing review” from the ATO and other revenue authorities, that it “stands behind” its tax return positions, and that “we hold a documented, long-standing reputation with tax authorities for integrity and professionalism.”

To contact the reporter on this story: Peter Hill in Sydney at correspondents@bloomberglaw.com

To contact the editor responsible for this story: Penny Sukhraj at psukhraj@bloombergtax.com

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