• Potential rough seas ahead for foreign acquisitions that were advised by PwC as Treasury acts on concerns raised by the ATO. (Image Source: Huon Aquaculture)
    Potential rough seas ahead for foreign acquisitions that were advised by PwC as Treasury acts on concerns raised by the ATO. (Image Source: Huon Aquaculture)

The reverberations from PwC Australia’s misuse of confidential federal tax information for commercial advantage continue, with Treasury revealing it is reviewing foreign takeovers that involved the consulting firm.

In its response to questions from Labor senator Deborah O’Neill, Treasury said it was “examining its records and working with the ATO to identify whether any foreign investment applications where PwC was involved were based on false or misleading information”.

The Sydney Morning Herald listed Bellamy’s takeover by China Mengniu Dairy Company in 2019 and JBS’ acquisition of Huon Aquaculture for $425 million in 2021.

Bellamy's and Huon have been approached for comment. 

“Subject to the findings of these investigations, Treasury will consider what further actions or responses may be appropriate to take,” it said.

The investigations were triggered by the ATO’s response to questions on notice in May.

It told O’Neill it had concerns that information from the Foreign Investment and Review Board (FIRB) applicant and/or PwC as advisor that, “while possibly legalistically correct, had the effect of misleading the ATO as to the intended use of aggressive tax structures by the FIRB applicant, with flow on effects for the ATO’s advice to Treasury”.

The ATO said one specific FIRB application and its applicant had triggered the matter being raised with the then PwC CEO, Luke Sayers. That case has been subject to multiple audits, amended assessments have been issued and the matter resolved.

The case resulted in reforms to the foreign investment application process including  a dedicated ATO compliance team that monitors and reviews foreign investment transactions and the role of advisors in tax structuring.

Since 1 January 2021, providing false and misleading information to the treasurer can result in criminal prosecution, civil penalty or infringement notice action. The treasurer also has the power to revoke a foreign investment approval on the basis of false or misleading information or documents, which applies to decisions made before and after 1 January 2021.

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