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AmextaFinance > News > PwC tipped off Google on timing of Australian tax law
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PwC tipped off Google on timing of Australian tax law

News Room
Last updated: 2023/07/05 at 2:15 PM
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PwC tipped off Google on the timing of a controversial Australian tax law, based on inside information gleaned by one of the accounting firm’s partners, it has been revealed.

The tech company is the first to be named as a recipient of confidential information in a scandal that has engulfed PwC Australia and led to the firing of eight partners.

A PwC partner who acted as an adviser to the Australian government passed information about upcoming laws to colleagues, who used it to tout for business on the US West Coast, according to internal emails unearthed in an investigation by Australian lawmakers.

A Google employee received an email from a PwC partner in August 2015 that said Canberra would be pressing ahead with a tax clampdown on multinationals the following year, despite pressure to delay the new legislation.

PwC last month disclosed details of the email to lawmakers, with the name of the company redacted. The firm said the company was unaware the information was confidential.

Google confirmed it was the company involved following a Reuters report on Wednesday.

“While it is disappointing to learn that PwC had inappropriately shared information, it had no bearing on our compliance with the Multinational Anti-Avoidance Law,” Google said, referring to the 2015 legislation.

The company added that changes Google made to its tax structure in Australia were done after the new law was passed and after engaging directly with the Australian Taxation Office, rather than simply on the advice of PwC.

In the uproar caused by the scandal, PwC’s Australian business has lost several government-affiliated clients, including the country’s largest pension funds and the Reserve Bank of Australia, and faces continued scrutiny by lawmakers.

The firm has shaken up its leadership in Australia to try to contain the reputational damage. Former chief executive Tom Seymour resigned in May after admitting he had received emails containing confidential information, and he was among eight partners the firm said this week had left or would be leaving entirely as a result of an internal investigation.

PwC Australia also sold its government consulting business for a nominal A$1 to try to ringfence its contracts from the fallout.

PwC on Wednesday said its clients were not involved in any wrongdoing and “no confidential information was used to enable clients to pay less tax”.

In a letter to Australian lawmakers last month, it said that while there were suggestions confidential information on the start date of the MAAL may have been provided to companies other than Google, “we have not identified any communication to any other company to that effect”.

Internal correspondence published as a result of the parliamentary investigation showed PwC discussing confidential information from its former tax partner Peter Collins based on his advisory work with the government.

A January 2016 email celebrated $2.5mn in new business in North America, which one partner wrote had been “heavily helped by the accuracy of the intelligence that Peter Collins was able to supply”. The Australian tax partners had worked “extensively” with other PwC firms around the world, including in the US, Netherlands and Singapore, the email said.

Additional reporting by Michael O’Dwyer in London

Read the full article here

News Room July 5, 2023 July 5, 2023
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