As Australia Wields Its Tax Muscle, Multinationals Squirm (1)

Like tourists who come for the koalas but keep finding spiders and snakes, companies lured to Australia’s singular market are navigating a flip side of doing business Down Under: the Australian Taxation Office.

The ATO this year is doubling down on its muscular approach to taxing and tracking foreign businesses—despite a major legal setback. And that’s prompting renewed complaints from US and European corporations.

“In fairness, maybe that’s a badge of honor for the ATO,” said Michael Clough, Australian chair and partner at King & Wood Mallesons. “They’re unashamedly implementing a policy of ensuring all multinationals pay.”

The ongoing ...