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Apocalyptic tax vision
In the hyper-reality of the latest James Bond adventure, 007's nemesis is a multinational media mogul who can start wars with a satellite broadcast.

But Hollywood leaves the taxation sub-plot untold, and there is titanic drama to be found in multinationals and tax.

Multinational corporations cruise the free market, afloat on fast-flowing capital and out of range of land-locked laws, leaving tax investigators paddling furiously behind.

International tax expert Tim Edgar says multinationals are in a position where the decision to pay taxes becomes almost voluntary.

"It's certainly an apocalyptic vision of countries and really becomes a game where governments are constantly playing with two hands tied behind their backs," Edgar says.

In Melbourne, Australia, Deakin University's Rick Krever agrees with him.

"Businesses that we're auditing have far greater resources, both in terms of financial resources and terms of world wide access to support, than tax authorities in any one country," he says.

"So that we're always running many, many steps behind them, and however good we are, indeed even entering into co-operative agreements like we are, we're still many, many levels below where the firms themselves are."

Tax professor Bob Deutsch says last year's Sydney meeting of tax investigators from across the world represents a new determination by authorities to find out how Murdoch's companies structure their affairs.

No comment from News Corp
News Corp says it is unwilling to participate in any public discussion of its taxation situation.

A News Corp spokeswoman told Background Briefing the corporation pays its taxes as required in the countries it operates in. She also says the corporation's unaware of any international investigation.

Rick Krever says just because news of the audit has become public, it's wrong to assume that Murdoch's broken the rules.

But Krever says News Corp does operate in a new generation of business that's hard to measure, especially when compared to older, slower industry which made tangible things in factories, and that left trails for tax investigators to follow.

He says it's much harder now to pin down where an industry that trades in intangibles belongs.

"If you're in the business of selling information, that's totally portable -- it can be anywhere, and there's no reason to assume that the copyright to films that you want to show should be sitting in Australia," Krever says.

"Why should they sit in Australia or the UK or the United States? There's absolutely no reason why a piece of paper, which is the right to show something, couldn't sit anywhere, so it could be sitting in the Cayman Islands, it could be sitting in the Cook Islands, it could be sitting in Hong Kong.

"And with information, if what you're providing, for example, is news services, news services don't need huge labour forces and raw materials and electrical power and everything that would cause us to set up in Melbourne or Sydney or Los Angeles or New York, you can provide a news service for anywhere in the world.

"There's a lot more scope for moving your operations, or parts of your operations, anywhere, and it's a lot more difficult for tax authorities to come in and say 'look, you really shouldn't be doing this in Hong Kong; this really should be done through the Australian office', because the stuff's totally portable, there's absolutely no reason why you wouldn't do it in Hong Kong instead of in Melbourne."

Watching Murdoch's magic
Pulling together the global threads of Murdoch's business is an art practised by Washington Post journalist, Paul Farhi.

His work culminated in an article in December, titled A Global Reach Keeps Taxman at Arm's Length. In it, he described how little tax Murdoch pays.

Of course, there's no love lost between US broadsheets like The Washington Post, and their tabloid competitors from Murdoch's stable.

The high profile of Rupert Murdoch in Washington also makes him a hot topic for the Post's readership.

	In The Washington Post office, Paul Farhi's just made another deadline. He says it is the international nature of Murdoch's business that injects drama into the tax chase.

NEXT: The Global Tax Return