They’re whooping it up in Canberra where the ACT’s Revenue department has won $77 million from Rupert Murdoch’s News Limited in unpaid stamp duty and penalties.
Rupert and the boys were allegedly trying to dodge tax on a $9 billion share transfer by whooshing the shares of a company called Karlholt off to the Bermuda Stock Exchange. ACT Revenue sued for the money, claiming “the listing of Karlholt on the BSX and the transfer of Karlholt shares were part of a tax avoidance scheme”.
And News Limited paid up, in a settlement that was kept secret until today. (Crikey went to ACT Revenue to confirm proceedings but they wouldn’t comment.)
Which is odd, because News spokesman Greg Baxter (of James Hardie fame) told the press last June (after a News Ltd victory against the ATO in a much bigger case): “The company has not and does not engage in any kinds of schemes to avoid paying tax.”
Well fancy that.
I can’t help recalling that 26 years ago, Australia’s one-time hero Alan Bond tried a similar shuffle in NSW when he took over Tooheys. Except that he got away with it, saving his empire some $9 million in tax by sending the shares on a holiday to Darwin.
After taking aim at Bond’s “trickery, sly lurks and devious schemes”, Debus treated NSW Parliament to his views on the morality of such tax avoidance, saying: “There are apologists for this type of tax avoidance. It is sometimes characterised as the right of every taxpayer. I have even heard it suggested as an obligation of a company director to shareholders. That is arrant nonsense. In ever sense but strict legality, it is nothing but a fraud practiced against the community.”
ACT residents will be pleased to hear that Rupert’s $77 million has helped put the territory’s budget back in balance.
Students of form may be interested to know that Murdoch has long been keen to keep those pesky tax payments to a minimum. Neil Chenoweth’s book Virtual Murdoch records that News Corp paid an average 7 cents in the dollar from 1986 to 2000, while The Economist reckoned the rate was 6 cents in the dollar for the four years to 1999. This compared with 31 cents paid by Disney and tax rates of 36%, 35% and 30% in Australia, the United States and the United Kingdom, where his companies operated.
The latest accounts show that News Corp has actually pulled money back from the world’s tax men over the last two years, with an income tax refund of more than US$1.5 billion during 2009 and 2010.
How does he do it? Quite legally of course, but no doubt with help from companies in tax havens. The US General Accounting Office noted in 2009 that News Corp had 152 subsidiaries, with a big flock in those delightful Caribbean holiday spots, the Cayman Islands and British Virgin Islands. This was more than any other major US company apart from the two big banks, Morgan Stanley and Citibank.
As an ACT resident, I may just write to Rupert and thank him.
Rupert the Tax dodger , should be jailed for fraud. The filthy rich are always the tight arse tax criminals.
Be patient folks, there may be something interesting in the Wikileaks files about Ol’ Rupe. Don’t forget the Swiss ex-banker who is about to spill some beans.
Just a theory but perhaps this would explain Fox News’s vilification of Assange.
@ZUT, I think you may have something there, I wait with eager anticipation