The big four accounting firms have been branded as aggressive, unethical, and accused of "perpetrating the greatest tax crimes in history" by a leading corporate tax authority.

At least $US1 trillion in tax revenue is lost worldwide, and $50 billion in Australia, as a result of aggressive tax minimisation schemes established by the four giant firms who audit the books of nearly all the world's major companies, said George Rozvany, a 32-year veteran of the corporate tax industry.

"And I'm a conservative man, I think the figure is actually much higher," he told the ABC.

"It's very clear to me that the big four accounting firms are the masterminds of international tax avoidance.

"They work with government to deliver what they want for their clients. It's not set in a social context; it's designed to deliver an outcome for their clients."

"The people who are most affected are the most underprivileged in our society, those without a voice. The homeless, foreign aid programs."

Mr Rozvany spent 32 years working in the corporate tax field, for Ernst and Young, Coopers and Lybrand (now PwC) and the defunct Arthur Anderson.

He was head of tax for chemical giant ICI in Australia as well as for the world's largest insurer, Allianz.

Mr Rozvany is Australia's most published author on transfer pricing, a technique that multinational companies are using increasingly to shift profits from high tax to low tax jurisdictions.

While his legal texts explained how to work within the law, Mr Rozvany argues that sham transfer pricing arrangements are now out of control.

"Transfer pricing behaviour clearly is the greatest concern because it's very easy for a transfer pricing expert to dress up a sham transaction as a real commercial transaction," he explained.

"I'm talking about service arrangements, intellectual property transfers, such as patents or use of patents, and perceived transfer of goods, sham loans between related parties, but in reality it's all about providing services at too high a price which then shifts [income] to a lower tax jurisdiction."

Major firms 'simply too big', should be broken up

Mr Rozvany likens the aggressive structures the big four accounting firms have developed for profit shifting to corruption, terrorism and Mafioso activity.

"They're all following the same financial sore," he said.

"Basically tax avoidance, corruption, terrorism: the money comes from somewhere. And the money typically needs to be hidden for the purpose of the perpetrators.

I don't believe the big four are involved directly in terrorism, but their structures are more than likely being used.

He cited the Luxembourg Leaks, which revealed the role of major accounting firms in global corporate tax minimisation as evidence of their aggressive tax behaviour on behalf of clients.

"Sham structures have been set up in Luxembourg, again, looking like normal commercial transactions but really with a view to being taxed in Luxembourg at 1 per cent as opposed to a 25 per cent or 30 per cent rate in another country," Mr Rozvany observed.

"The cost to the international community is enormous."

Mr Rozvany argues that the big four should be broken up, and their tax and audit functions separated out into separate firms, a view shared by some European politicians and regulators.

He is advocating for the use of anti-trust laws to create eight separate accounting firms and eight tax law practices.

"They're simply too big," he argued.

Mr Rozvany also advocates for an "ethical tax principal" that would allow companies that adhered to established tax rules, and did not engage in aggressive tax minimisation practices, to qualify for a discounted company tax rate.

there are certain countries which cooperate & derive wealth out of assisting the tax avoidance industry
And it's not just the micro countries you commonly hear about, such as Bermuda or the Bahamas or Grand Cayman.

Grappler Deep State Feller wrote on Jul 11^th, 2016 at 7:36pm:


No, there is only legal.

crocodile wrote on Jul 11^th, 2016 at 8:47pm:


A bit of hyperbole from the socialists with the thread title, if they were avoiding tax they would end up in jail.

The socialist dim wits should listen to Milton Friedman or even Kerry Packer who said you should get your head checked out for mental illness if you paid any more tax than you have to.

Grappler Deep State Feller wrote on Jul 11^th, 2016 at 10:48pm:


Ideally, it should be abolished. Not entirely practical with the benefit of limited liability but needs to be much lower.

crocodile wrote on Jul 11^th, 2016 at 8:47pm:


A bit of hyperbole from the socialists with the thread title, if they were avoiding tax they would end up in jail.