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PwC launches review of Australian tax law leaks

PwC launches review of Australian tax law leaks

PwC has launched an independent investigation into the practices and culture of its Australian division following the release of internal emails related to a scandal involving the sharing of confidential government information about planned tax laws.

The emails, published by a Senate committee, revealed how PwC had used confidential information belonging to Peter-John Collins, Australia’s former head of international taxation, to win new business by advising clients on Australian rules aimed at preventing tax avoidance. to counteract.

Collins was a member of an advisory group that has been involved in confidential discussions with the Australian Treasury Department over the past decade on the introduction of laws targeting multinational tax avoidance and a diverted profit tax. He had signed strict confidentiality agreements.

He was suspended by the tax watchdog in January, after which PwC indicated that a small number of partners had received the confidential information.

However, the publication of the partially redacted emails in recent days showed that the information provided by Collins extended beyond Australia and included employees in the UK, Ireland and the US.

Tom Seymour, the head of PwC Australia and former head of the tax practice where Collins worked, admitted at an internal meeting on Friday that he was one of a number of partners who received emails about the “marketing approach and financial success of the tax consultancy” . ”. He said this was evidence of the “cultural problem of the time”.

PwC Global said the consultant would take “appropriate action” following a review of the Australian unit and its partners. “We deeply regret the situation that has arisen in Australia. It is unacceptable and goes against our culture and values,” the statement said.

PwC’s Australian operations are one of the largest in its global network, with sales of A$3 billion ($2 billion) in the most recent financial year. The Australian government is the largest customer and the scandal has sparked a backlash in the country.

Jim Chalmers, Australia’s treasurer, has strengthened the powers of an accountancy industry watchdog in response to PwC’s behavior which he described as “completely unacceptable”. Barbara Pocock, a senator from the Greens, has called for PwC to be barred from further government work and for the 14 clients it advised to be disclosed based on Collins’ advice.

The 144 pages of internal correspondence revealed how PwC used Collins confidential information to win clients, including US technology companies. With its inside track, it was able to advise multinationals on how to deal with Australia’s new tax regimes almost as soon as the laws were published in 2015 and 2016.

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

Collins frequently stressed in communications that the information was “strictly confidential” and should be treated as “rumour”.

PwC’s global bosses launched a $12 billion investment and branding campaign in 2021, focusing on “gaining the trust” of a wide range of stakeholders. The plan included establishing a Trust Leadership Institute where PwC would teach clients how to “build trust”.

The Australian controversy is the most recent high-profile issue facing PwC over its tax practices. A former PwC employee convicted of disclosing documents in the LuxLeaks scandal, which revealed the company’s role in helping multinationals gain approval for tax avoidance structures, was charged in February by the European Court of Rights van de Mens recognized as a whistleblower.

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