News Corp Australia has denied claims made by Fairfax that it “siphoned off $4.5 billion in cash and shares from its Australian operation, virtually tax-free.”
The claims were made in a story by Fairfax business columnist Michael West yesterday, based on the numbers by University of NSW accounting academic Jeffrey Knapp.
Knapp calculated that over the past 10 years publisher Rupert Murdoch's companies in Australia have paid income tax equivalent to a rate of 4.8% on $6.8 billion in operating cash flows, or just 10% of operating profits.
News Corp Australia CEO Julian Clarke rebuked the claims in a statement saying: “This claim is based on a fundamental misunderstanding of the nature of these transactions, US and Australian tax treaties and applicable Australian tax law.”
The statement outlined that over the last five years, News Corp has paid $417 million in corporate tax and withholding tax on accounting profits of $815.9 million. It went on to say News Corp also paid $900 million in goods and services, fringe benefits and payroll taxes over the last five years.
Clarke is set to appear in front the Senate Committee tax hearing tomorrow in Sydney, on behalf of News Corp, and he will be joined by representatives from Microsoft, Google and Apple also defending their tax arrangements.
It isn't just News Corp that's been in West's sights, with West writing a column about big tech and big tax avoidance for the AdNews Annual last year which highlighted the fact that there are many multinationals operating here that are “skiving” their tax obligations.
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