The Tax Practitioners Board has revealed that its analysis of the documents related to the PwC tax leaks scandal showed that more than a “dirty six” were involved in sharing confidential information related to multinational tax avoidance.
TPB chief executive officer Michael O’Neill told senate estimates that PwC’s assertion that there were only six people tagged by Coalition senator Richard Colbeck as the “dirty six” involved in the tax leaks saga understated the reality.
O’Neill said that the analysis of the documents by the TPB found that there appeared to be more than six individuals involved in the sharing of information across the relevant firms in the PwC network.
“Also, without prejudice into the scope of the investigation into the individuals of the firms, the suggestion that [the] Linklaters report lands on six people in the international firm is not consistent with our analysis of the documents,” O’Neill said.
PwC representatives gave evidence to the Colbeck-chaired senate committee looking into consulting firms last October that they were engaging with and reporting to the PCAOB on matters related to the tax policy leaks saga, and the TPB told Senate estimates that it had written to the regulator for its assistance.
O’Neill said that it appeared the PCAOB was unable to share any investigation material with the TPB so that avenue was closed off as a source of information.
He also observed that what appeared to have been occurring with PwC’s involvement in what is known as the Base Erosion Profit Shifting program, or BEPS, across the globe that the firm had blended private and public consultations on multinational anti-avoidance rules to influence debate globally on the issue.
“Our investigation is really targeting, senator, that communication that happened at that time between the Australian firm and the International firm, and they will be one of the issues that we’ll need to be engaging PwC on to understand whether that raises regulatory issues under the Tax Agent Services Act,” O’Neill said.
Both Colbeck and his references committee colleague senator Barbara Pocock sought feedback from the ATO on how it works with other regulators to deal with the PwC matter given that information was shared globally.
ATO deputy commissioner Rebecca Saint told the estimates committee that ATO engages with tax authorities across the world and that each jurisdiction will deal with investigations and alleged breaches differently depending on their law.
What was common between the jurisdictions, Saint observed, was that each of them had an interest in the Linklaters report that PwC Australia asserts the London-based PwC International Limited is refusing to release to the Australian firm so it may cooperate with requests from the Australian Senate and other authorities.
A public company extract from the online companies register in the UK obtained by The Mandarin confirms that PwC International Limited, a private company based in London, has a PwC Australia partner as one of its active directors and that partner is also on the local PwC governance board with Kevin Burrowes, the firm’s chief executive officer.
“Whilst there is a level of interest in that Linklaters report globally the ability of the regulators to be able to see that or access that is somewhat hampered by the fact that it is going to be privileged,” Saint said.
“I think the question for PwC Australia is if you haven’t seen the report how do you know the investigation has actually occurred and identified all of those partners in that chain so I think that is certainly something that we would be expecting PwC Australia to have a great level of interest in.”
ATO second commissioner Jeremy Hirschhorn told the Senators at the estimates committee hearing that there is a need to remember for whom a particular document or documents are privileged when seeking to unpick the lack of cooperation from PwC with the senate committees and regulators regarding the release of the Linklaters report.
“There’s been a lot of discussion about legal professional privilege. I think it is very important to remember that legal professional privilege is not the lawyer’s privilege. It is the client’s privilege,” Hirschhorn said.
“And so when somebody says that they will not provide a document to you on the basis of legal professional privilege it is really saying ‘I don’t want to provide you the document and you can’t make me’ which is the exact opposite to cooperation. I just make that observation.”
READ MORE:
Any feedback or news tips? Here’s where to contact the relevant team.