Technology giants like Apple, Google and Microsoft should be made to declare where they call home for tax purposes when bidding for Australian government work so agencies can avoid tax dodgers, a senate committee has recommended.
The senate standing committee on economics - which has been investigating corporate tax avoidance since October last year - today tabled its report into the issue, informed by 121 submissions and five public hearings.
It recommended government departments reconsider buying products and services from companies that have been singled out as tax dodgers.
The committee said the likes of Google, Apple and Microsoft should be required to state their country of domicile for tax purposes during the negotiation process for government work.
If an identified 'tax dodger' company is awarded a valuable contract, the agency in question should be required to notify their portfolio minister, the committee said.
"As a role model for the community, the committee considers that the Australian Government should evaluate tenders for the goods and services it procures using a comparable tax benchmark and not disadvantage Australian companies that have higher tax burdens than competitors from other jurisdictions," the Labor and Greens majority of the committee wrote.
The recommendations come in response to concerns that the Australian government has been lambasting tax dodging technology companies while at the same time continuing to hand over tax payer funds in lucrative government deals.
Earlier this year the committee took Google, Apple and Microsoft to task over their tax arrangements in during hearings that saw Google and Microsoft both admit to sending Australian revenue to Singapore. Apple, meanwhile, refused to disclose details of its international tax structure.
The Australian Tax Office later said it did not entirely believe all of the claims made by the three technology companies.
Name and shame register
Among the committee's 17 recommendations tabled today, it suggested the ATO create a name and shame register for those under investigation for tax avoidance.
The committee also suggested the ATO run a public register of tax avoidance settlements above a certain threshold.
The ATO should also partner with Treasury to compile an annual report on the "aggressive tax minimisation activities and tax avoidance schemes" of large local and global businesses, it said.
The report would include the amount of tax Australia misses out on annually because of such schemes.
Assistant Treasurer Josh Frydenberg, however, put any notion of a name and shame register to bed, reportedly claiming such a measure wouldn't raise any extra money for the tax office while being unlikely to provide a good understanding of the complex range of factors at play.
Government MPs say no
In a dissenting report written by the committee's two LNP members, Sean Edwards and Matthew Canavan said they had "deep concerns" about the majority report's recommendations.
They argued the government had already undertaken significant efforts to clamp down on tax avoidance, such as cooperating with the OECD's base erosion and profit shifting (BEPS) project, dedicated Tax Office investigations, and work on a voluntary disclosure code.
It also highlighted new laws passed by the former Labor government that will from this year allow the ATO to begin publishing data from tax filings of companies earning more than $100 million annually.
The law is expected to impact up to 2000 companies operating in Australia. The data to be published will include the total income, the taxable income, and the income tax payable for the 2013-14 year.