Australian police probe PwC tax leak scandal

Australian police have opened a criminal investigation into the leaking of secret government tax plans by accounting giant PwC to help clients “act early” ahead of a tax crackdown on multinationals.

PwC Australia has been embroiled in scandal since one of its partners was found to have made “unauthorised disclosures” about the planned tax reforms, which he learned about in confidential government briefings.

More than 140 pages of internal PwC Australia emails released by a Senate committee this month showed the international tax partner, Peter Collins, had divulged the sensitive information to other staff.

Australian Federal Police confirmed in a statement late Wednesday that they had launched a criminal investigation, after the affair was referred to them by the Treasury Department.

“We note the statement from the Treasury Secretary and will continue to cooperate fully with any investigations into this matter,” a PwC spokesman said Thursday.

The Treasury’s confidential tax plans included new rules, which came into effect in 2015, to stop multinationals avoiding tax by shifting profits from Australia to tax and secrecy havens, the Tax Practitioners Board said.

Finance Secretary Jenny Wilkinson told parliament that PwC had been asked to stop all staff linked to the leaks from working on current government contracts.

The request was made after it was revealed a “wide range of individuals” at the firm, beyond Collins, were aware of the confidential information.

“I consider PwC’s abuse of confidence and trust with the Treasury and PwC’s subsequent handling of this breach to be a very serious issue,” Wilkinson told a Senate estimates hearing.

In the redacted PwC emails, an internal message from 2016 lauded the company’s success in urging companies to “act early” on the tax changes, “heavily helped by the accuracy of the intelligence that Peter Collins was able to supply us”.

Officials said current government contracts with PwC totalled Aus$255.2 million (US$167 million) this financial year.

Collins was deregistered as a tax agent in November last year and barred from reapplying for two years for sharing the confidential details, Australia’s Tax Practitioners Board said in January.

PwC Australia’s former chief executive Tom Seymour stood down on May 9 over the scandal.

The global PwC network said at the time that the affair represented a clear violation of its code of ethics.