Australia’s federal government has a plan to discourage companies from shifting profits to tax havens. The idea is to impose a “global minimum tax” on large Australian and foreign-owned companies with subsidiaries in low or no-tax countries.
Australia’s largest mining companies are notorious for shifting profits to avoid the 30% company tax rate. It is common to use marketing hubs in Singapore, where the headline tax rate is 17% but various incentives often lower the effective rate to about 5%. Paying Singaporean subsidiaries for “services” performed, such as marketing or to use trademarks or patents owned by the group, can reduce a company’s Australian profits, and its tax bill.
