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Hockey brands tax-evading companies 'thieves'

Some of the largest technology companies operating in Australia could come under the scrutiny of Federal Treasurer Joe Hockey, as he calls out corporate tax evaders as 'thieves'.

Australian Treasurer Joe Hockey said that the weekend's G20 summit in Brisbane would focus on the issue of tax-cheat "thieves", saying it requires a global effort to combat companies evading tax.

"They're stealing from us and our community," he told the Nine Network on Friday. "The only way we can address this is through global action.

"We can have all the measures we want in Australia, but there will still be ways they can try and reduce, significantly reduce, or even evade their tax obligations in Australia," he said.

Hockey's comments come just weeks after the Australian Senate voted in favour of a motion to launch an inquiry into corporate tax avoidance , which is likely to focus on some of the largest technology players in Australia, including Apple and Google.

The Senate inquiry into corporate tax avoidance, which was put forward in a motion by Green's party leader Senator Christine Milne in October, will look at "tax avoidance and aggressive minimisation by corporations registered in Australia and multinational corporations operating in Australia".

"Instead of pulling safety nets out from under people in our community who most need support, the Abbott government should look for ways to raise revenue from those who can afford to pay," said Milne at the time.

In 2013, the Australian government called out companies such as Google and Apple for using the so-called "Double Irish Dutch Sandwich" tax structure, which sees companies funnel money through lower-taxation countries such as Ireland in order to pay very low taxes domestically, despite significantly high revenue from the likes of Google's advertising and Apple's products sold in Australia.

In May last year, the Department of Treasury released an issues paper seeking views on whether this is something the government should address.

"Tax laws that allow some companies, such as large multinational enterprises, to access more favourable tax treatment than domestic firms will distort the allocation of scarce resources within the economy, and imposes efficiency costs that are ultimately borne by all Australians," the paper stated.

It was revealed earlier this year that Apple, which has been using the technique for decades, made AU$5.9 billion in revenues in Australia and New Zealand. However, after increases in expenses, the company reported a drop in net profit to AU$58.4 million, allowing it to pay only AU$40 million in taxes — compared to AU$94.7 million in 2011.

While there are a number of low- or no-tax regions around the globe that companies can use for tax-avoidance purposes, such as the British Virgin Islands, Bermuda, the Cayman Islands, and Jersey — according to a report by multi-industry union United Voice and the Tax Justice Network Australia — Apple's low-tax haven Ireland is moving to phase out its corporate tax loophole by 2020.

In October, Ireland's Finance Minister Michael Noonan announced in his Budget speech that the country's government would introduce legislation that would force companies that are registered in Ireland to become tax residents in the country.

"Aggressive tax planning by multinational companies has been criticised by governments across the globe, and has damaged the reputation of many countries," Noonan said at the time. "This proactive change will not bring an end to international tax planning; that requires coordinated action by all countries."

A number of US-based technology companies are known to make use of the Double Irish tax arrangements, including Facebook, Twitter, IBM, GE, Oracle, Microsoft, Yahoo, and Adobe, along with Apple and Google.

Google chairman Eric Schmidt said in late 2012 that the company is simply engaged in "capitalism".