Senator Asks 4 Accounting Giants to Describe Malta Tax Advice
Ron Wyden, ranking Democrat on the Senate Finance Committee, is investigating the firms over their role in helping corporations dodge billions in taxes.
“Big companies are setting up subsidiaries in Malta … to shield their profits from taxes … [They] have used the tiny archipelago to exploit its near-zero effective corporate tax rate, shifting taxable profits away from countries where they have actual employees and customers.”
A different kind of theft.
The greens.org.au - LABOR’S REVIEW INTO KPMG JUST MORE TINKERING
ATO claim could change everything for whistleblowers
A small Queensland manufacturer, its former management accountant and an online Australian Taxation Office portal are the unlikely ingredients for what may prove a seismic shift in Australia’s whistleblowing laws.
It could all come down to a Federal Court judge tasked with deciding a crucial and novel question: Do regulators such as the Tax Office owe a duty of care to whistleblowers?
At the centre of the case is the argument that the ATO is liable for what allegedly happened to the whistleblower – an argument that breaks new legal ground. AFR
The litigant asking the court to take this step, Soroush Safarimaznabi, is entirely self-represented. But impressively, he has already scored a major interim win against the ATO – with the strongest signs yet that the court might just accept his novel theory when the case comes to trial.
“The ATO has been actively encouraging people to assist it,” Safarimaznabi told this newspaper. “My concern is the gap between that encouragement and the responsibility accepted when the person providing the information needs protection.”
Safarimaznabi’s case has attracted interest from a squadron of high-powered lawyers, including Perry Herzfeld, SC, the same silk leading the High Court challenge against the federal social media ban.
This month, those high-powered lawyers secured leave to intervene in the case. They won’t be representing Safarimaznabi, but will instead urge the court to recognise that regulators owe whistleblowers a duty of care.
One of those interveners – or “friends of the court” – is Kieran Pender, associate director at the Human Rights Law Centre. Pender described the lawsuit as an important test case.
“Whistleblowers are key to exposing potential wrongdoing and ensuring governments, regulators and companies can take action,” Pender said.
“That is why it is so important that regulators protect, support and empower whistleblowers to speak up.”
Or as Safarimaznabi put it: “The public benefits when people are willing to expose suspected wrongdoing. A system that seeks that benefit must take the risks to those people as seriously as the information they provide.”
‘Encouraged’ to blow the whistle
Safarimaznabi once worked at the Queensland company Oakmoore, which makes car accessories and building interiors. In 2024, the trained accountant thought he had found “tax-related irregularities” in Oakmoore’s books. The company denies all wrongdoing.
Safarimaznabi logged onto the ATO’s website and found a page titled “confidential reporting of tax evasion”.
The page included a “tip-off form” and a reminder that laws exist to “protect tax whistleblowers”, by shielding their identity and guarding them from “detrimental conduct”.
“For example, you can’t be dismissed, harassed or intimidated, harmed or injured (including psychologically) by your employer.” “We encourage you to report,” the webpage urged.
Using the tip-off form, Safarimaznabi did exactly that.
He claims that Oakmoore then victimised him, harassed him and eventually terminated his employment. Oakmoore denies wrongdoing.
But the real rub of Safarimaznabi’s case is his argument that the commissioner of taxation is also liable for what allegedly happened to him – an argument that breaks new legal ground.
“Some may ask, how could a duty not arise in such circumstances?”
The commissioner owed him a duty of care, Safarimaznabi says, because the ATO encourages members of the public to make complaints, and because the law gives all the power to the ATO, leaving whistleblowers “vulnerable” to how the ATO handles the case – in particular, how they protect the whistleblower’s identity.
In Safarimaznabi’s version of events, the commissioner breached this duty of care by omission: he says the ATO did nothing to investigate his claims, offer him support, or stop Oakmoore from allegedly mistreating him.
The ATO sought to have these claims thrown out, but in an important win for Safarimaznabi, Federal Court Justice Sarah Derrington refused.
Derrington observed that the commissioner encouraged people to make tip-offs, and had even “advertised for assistance in dealing with ‘tax evasion’”.
“The request was in the nature of a ‘call to arms’,” the judge said. In return, the commissioner made certain promises, for example, to take steps not to reveal whistleblowers’ identities.
“Some may ask, how could a duty not arise in such circumstances?” Derrington said. True, the claim was “novel”. “That does not mean it is unarguable.”
If Safarimaznabi succeeds, it could be a major step forward for whistleblower protections, according to Andy Schmulow, a law and corporate governance expert at the University of Wollongong.
“It is sometimes a curious thing the way the common law is developed, sometimes in an innovative way to make up for legislative failures,” Schmulow said.
“If he’s successful and he can show the ATO did have a duty of care and they breached it – then happy days.”
The Tax Office said it has robust processes in place to receive and assess all tip-offs, and to ensure compliance with the whistleblower protection and confidentiality provisions contained in the tax laws.
It added that it would not be appropriate for the ATO to comment on the matter currently before the court.
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