Call to tear up treaties with tax havens Google's Australian arm paid just $74,000 in tax in 2011 despite generating billions in sales revenue. Doubts have been raised about global efforts to tackle tax avoidance by the world's biggest corporations, with experts saying Australia would be better off terminating unfavourable tax treaties. The Paris-based OECD will give an update on its recommendations to governments on Thursday in its latest round of plans to crack down on profit shifting. But some observers say the recommendations will go nowhere without a willingness from countries - particularly the US - to implement the new rules, and called on countries such as Australia to consider abolishing its treaty arrangements with Ireland and other low-tax jurisdictions. Ireland's low corporate tax rate has been widely abused by companies, including Google and Apple, which have sought to shift profits through the tiny nation to lower their tax bills. Australia has been among the victims of such strategies, with Google's Australian arm paying just $74,000 in tax in 2011 despite generating billions in sales revenue. "The OECD can't actually do anything by itself," said Michael Kobetsky, a tax lawyer at the Australian National University and a consultant to the OECD. "A quick way to fix tax avoidance of US multinationals in Australia would be to terminate the Irish treaty and implement domestic source rules, whereby income derived by Irish companies from Australian customers has an Australian source," he said. Treaties have been terminated by countries in the past, including by Mongolia, which cancelled its double-tax treaty with the Netherlands in 2012 after it feared it would lose tax dollars from its lucrative gold and copper mines. However, such cancellations are rare. "Multinationals are using the Irish treaty to shift money out of Australia," Dr Kobetsky said. [Terminating a treaty] is a very crude and unilateral measure which would be more effective if other countries consider terminating their treaties with Ireland. Cash-strapped governments around the world are trying to claw back tax dollars from multinationals that use complex ownership structures to avoid paying tax. The OECD's briefing will provide an update on its action plan to address the issue. Civil society groups have called for a radical overhaul of the global tax system, claiming the digital economy has facilitated ever more sophisticated tax-driven restructuring of companies. "The tax treaty agreements are for the benefit of business, but what we are seeing is the abuse of these treaties," Mark Zirnsak, a local representative of the Tax Justice Network, said. The Australian government should be looking at our treaties with Ireland and the Netherlands and asking what are the net benefits. Serena Lillywhite, Oxfam's mining advocacy adviser, said while treaties were important, transparency should also remain a focus. "The practice of profit shifting ... is allowing companies to minimise their tax bill and in some cases dodge tax altogether," she said. Clearly this issue must be addressed. Lobby groups representing international banks such as Deutsche, Citibank and Macquarie Group have resisted calls for changes to global tax rules, urging the OECD to consider the "extensive legal and regulatory environment" that already governed financial services.