Australia markets open in 2 hours 39 minutes

    -93.80 (-1.50%)

    -0.0015 (-0.22%)
  • ASX 200

    -97.40 (-1.61%)
  • OIL

    -1.09 (-2.92%)
  • GOLD

    -9.00 (-0.48%)

    -31.46 (-0.16%)
  • CMC Crypto 200

    +22.12 (+9.11%)

Fiat accused of tax evasion by former CEO

The former Australian head of Fiat Chrysler has thrown the automobile giant under the proverbial bus while responding to allegations he misused $30 million of company funds.

Clyde Campbell says his previous employer engages in the illegal tax-avoidance practice of transfer pricing, which is when company profits are sent overseas to subsidiaries in countries with lower tax.

Fiat Chrysler Automobiles' Australian net profit is calculated "after tax and transfer pricing adjustments", according to documents Mr Campbell filed with the Federal Court in Melbourne.

The claim was made in response to the carmaker's lawsuit against the former managing director.

The manufacturer of Jeep and Alfa Romeo alleges Mr Campbell misappropriated $30 million and spent money on a yacht, a plane, luxury spa holidays and gave away cars to celebrities and friends during his four-year tenure.

But Mr Campbell's counter claim of transfer pricing is likely to attract the attention of the Australian Taxation Office, which is trying to clamp down on tax avoidance by multinational companies.

"If the auditors aren't already in there, they'll be getting there very quickly," John Taylor, head of business law and taxation at the University of NSW, told AAP on Thursday.

Japanese multinational Toyota has previously been investigated by the tax office for transfer pricing.

Professor Taylor said one of the biggest obstacles facing the ATO was gathering information about companies.

It's extraordinary that internal information about Fiat Chrysler had now been made public, he said.

"It's quite unusual for a major executive of a company to come out and disclose, without being compelled, a whole lot of fairly tax-sensitive and what could be commercially-sensitive information," he said.