The Abbott government\u2019s planned laws to deal with multinational tax avoidance are an opportunistic revenue grab that could be vigorously resisted by the United States, according to Craig Cooper, director at accounting firm, RSM Bird Cameron.\nTechnology companies that are diverting profits from no-tax or low-tax jurisdictions to reduce the tax they pay in Australia are likely to be hit by the government\u2019s proposed \u2018Multinational Anti-Avoidance Law'.\nAustralia is following the UK in trying to tax profits that are generated by sales of products and services in both countries and diverted offshore to these jurisdictions.\nBut according to Cooper, taxation is never about where money came from, it\u2019s about where the underlying value is created. He said nothing inside the Apple iPhone, for instance, has been created in Australia.\n\u201cI think it\u2019s going to backfire \u2013 the Americans were not happy with the concept of the diverted profits tax [in the UK] and I think they are going to be less happy [about the Multinational Anti-Avoidance Law],\u201d he said.\n\u201cAt least with the diverted profits tax that was an arguably legitimate tax. If it was paid, then the American companies would be entitled to a credit. This one is 100 per cent penalties, which are not going to be creditable back in the US.\n\u201cThe Americans quite frankly are probably going to say \u2018hey buddy, those profits that you are taxing, they are not your profits, they are our profits.\u2019\nA large part of the \u2018tax mess\u2019 the world is in at the moment is due to the fact that the US taxation system doesn\u2019t work as it should, he said.\n\u201cThey [US multinationals] should bring those profits back to America and tax them in America. If that happens, there would be no incentive for the Americans to do what they have done.\u201d\n\u201cYou can work hard to extract profits legitimately from Australia \u2026 and those profits go straight back to America and get taxed there at 35 per cent \u2013 that\u2019s pretty smart, let\u2019s get them out at 30 per cent and tax them at 35 per cent,\u201d he said.\n\u201cThe first framework piece is that you\u2019ve got to be able to keep the profits out of America and that\u2019s where the American tax system is flawed,\u201d he said.\nCooper argued that the existing framework for taxation has been developed for the industrial economy and is no longer fit for purpose for the digital economy.\nHe said it\u2019s \u2018rude\u2019 of the government to claim that multinationals are engaged in massive tax avoidance.\n\u201cThis suggests that the law is clear, and the law is not clear, it\u2019s patently not clear,\u201d he said.\n\u201cFor Joe [Hockey] to say \u2018we are going to hit you with the anti-avoidance provision,\u2019 is rubbish. It\u2019s all done for politics. The [UK government] did the diverted profits tax ahead of the general election and that seemed to work well for [British PM] David Cameron,\u201d he said.