Australian Billionaire Rupert Murdoch's News Corp Under Scrutiny In Tax Avoidance Inquiry In Australia

Australian-born billionaire Rupert Murdoch has been accused of taking $4.5 billion worth of cash and shares from his media empire in Australia almost tax-free in the last two years. Murdoch’s Australian businesses had reportedly paid income tax of just 10 percent of operating profits.

In the last 10 years, Murdoch’s companies had paid 4.8 percent on $6.8 billion operating cash flows, according to the calculations of University NSW accounting academic Jeffrey Knapp. News Corp Australia chief Julian Clarke is expected to appear before the Senate panel investigating corporate tax avoidance within the week, reports SMH.

Along with other multinational companies like Google, Apple, Rio Tinto, BHP, Fortescue and Glencore, News Corp will also be subjected to an inquiry to address rising concerns that global corporations do not pay their taxes fairly in Australia. A spokesperson for News Corp said the company’s financial statements are in compliance with the Australian Accounting Standards and Corporations Act 2001.

Knapp said that as a result of News Corp’s “magic pudding”, share capital of the company had increased by $7 billion due to a temporary adjustment to intangible assets. “As a result of doing nothing more than putting a new $2 company at the top of the Australian group, they later returned that capital in cash and shares with little tax consequence,” explained Knapp.

University of Sydney Professor Emeritus Bob Walker said it was “plainly anomalous” that local subsidiaries of major multinational companies do not consider themselves reporting entities. When local subsidiaries declare themselves non-reporting entities, they do not have the obligation to comply with Australian accounting standards.

The Australian corporate tax avoidance inquiry, initiated by Greens party leader Christine Milne, will begin this week. Milne said the Greens is determined to see amendments in the legislation to require multinational companies to pay their fair share of tax to reach higher levels of transparency.

ABC reports that the Senate Economics References Committee will examine the adequacy of the country’s current tax legislation and the role of the Australian Tax Office. The committee will be headed by the Federal Opposition’s Sam Dastyari.

To report problems or leave feedback on this article, contact: r.su@ibtimes.com.au