16 May 2016
by Kaye Lee
Piss off ya nasty old bludger...
According to a 2015 headline in Rupert Murdoch’s rag, The Australian, “No, the rich don’t pay a ‘fair share’ of tax. They pay all of it.”
The hypocrisy of a Murdoch-owned entity discussing tax is overwhelming.
In 1999 the BBC published an article clearly setting out Murdoch’s well-known strategy for tax avoidance...
Further research reveals that Mr Murdoch’s main British holding company, Newscorp Investments, has paid no net corporation tax within these shores over the past 11 years. This is despite accumulated pre-tax profits of nearly £1.4bn. Payments were made in some years, but in others rebates were claimed.
…analysts suggest Mr Murdoch’s team broadly employ three strategies:
- Tax relief claimed on debt interest repayments.
- A reliance on off-shore tax havens.
- Exploiting global differences in accounting standards.
The first principle, which effectively allows companies to off-set profits against previous losses, is well established, says Iain Stewart, a partner with the accountancy firm KPMG.
“If you were going into a country with a high tax rate you would tend to finance any investment into that country using debt,” he says.
This effectively involves getting the holding company to lend money to the newly-formed, loss-making company.
About 60 News Corp subsidiaries are incorporated in tax havens such as the Cayman Islands, Bermuda and the British Virgin Islands.
No- or low-tax havens are a tried and tested method of minimising contributions to the public coffers. Havens such as the Isle of Man and Jersey simply require companies not trading there to make an annual one-off corporation tax payment.
Hong Kong, now a part of China, where Mr Murdoch is conducting an increasing amount of business, has a corporation tax rate which, at 17%, is more than half that of the US.
News Corp’s status as a truly multinational company enables it to make the most of varying accounting standards around the world. Australia, for example, where the company is incorporated, has some of the most relaxed accounting principles in the developed world.”
Despite everyone knowing for decades that Murdoch refuses to pay his “fair share” of tax to the countries that have made him a billionaire, he is allowed to continue on his merry way, still exploiting the exact same tactics.
In February 2014, the ATO was forced to pay Rupert Murdoch $880m because, in 1989, he restructured his company using the tax haven in Bermuda.
The restructure was funded by two cheques, totalling $3.27 billion, drawn on the account held by subsidiary News Finance at the Pitt Street, Sydney, branch of the Commonwealth Bank.
However, the money flowed back into the account the same day the cheque was drawn.
News subsequently claimed deductions for foreign exchange losses incurred because it later paid back loans denominated in US dollars in Australian dollars, which had fallen in value.
News Corp has also been on the losing side in tax cases. In 2010 it settled a tax avoidance case for $77 million after the Murdochs listed the family company Kayarem on the Bermuda stock exchange days before it was sold to News in 2005, to sidestep $52 million in Australian stamp duty.
In September 2014, a report by the Tax Justice Network – an international group focused on investigating tax avoidance – revealed that Rupert Murdoch’s 21st Century Fox pays 1 per cent tax.
Then in April 2015, it was further revealed that Rupert Murdoch’s media empire in the US has siphoned off $4.5 billion of cash and shares from his Australian media businesses in the past two years, virtually tax free by means of a dodgy share deal.
Normally a company will return cash to its offshore parent by way of dividends from shares or interest from loans. These however attract withholding tax. Murdoch, instead, created a $2 company at the top of its web of Australian companies. This company, News Australia Holdings, then issued 77 billion shares to News Corporation in New York. The siphoning off of cash could then be called “a return of capital.”
A Senate inquiry in May 2015 was told that Rupert Murdoch’s News Corp is ATO’s top tax risk. Four years ago, 13 of the country’s biggest companies were in Q1, the ATO’s highest-risk category for tax avoidance, but now only News Corp Australia remains, reflecting what is described as a secretive, aggressive approach to the ATO.
Then in January this year, Australian Taxation Office data revealed that 8 of the 10 media companies that paid no income tax in Australia in 2014 are linked to the Murdoch family.
So before they demonise the unemployed, the disabled, and people like Duncan Storrar who had the temerity to ask why we give tax breaks to the wealthy, let’s be clear about who are the real takers, the users, the leaners.
If what Rupert Murdoch has done is not illegal then the laws are wrong.
I am sick of this blood-sucking leech, who contributes nothing to society, dictating to us. I am disgusted that when he crooks his finger, world leaders come running rather than risk the vitriole that his vile papers have poured out on people like Julia Gillard and Duncan Storrar.
Rupert, you are not the Messiah. You are just a very greedy, nasty old man.