The interim report on corporate tax avoidance

Late Tuesday afternoon this week, the Senate Economics References Committee released its interim report on ‘corporate tax avoidance'. The report, entitled ‘You cannot tax what you cannot see' contains 17 recommendations drawn from the inquiry, including recommending the Australian government take unilateral action to combat tax avoidance and the introduction of a mandatory tax reporting code.

To put these recommendations in some context, below is a synopsis of the activity already occurring in this space:

  • Australia is heavily involved in the OECD's work that seeks to address base erosion and profit shifting in a co-ordinated way. The OECD recommendations are due out in the next month or so.
  • Australia has also sought to move unilaterally on this issue with the government intending to introduce the proposed ‘multinational anti-avoidance law' tax integrity measure at some stage in the Spring Parliamentary sitting. Our views on this proposal are contained in our submission to Treasury.
  • There are domestic transparency laws in place under which the ATO is required to report the name and ABN, total income, taxable income and tax payable of corporate taxpayers with income of $100 million or more. The first report containing this information is due out later this year. Our views on the transparency laws are contained in our latest submissions to Treasury and the ATO on our website.
  • The Board of Taxation is working on preparing a voluntary tax transparency code, including what the code might look like, who can disclose information under the code and who is the intended audience of the information disclosed. The Tax Institute attended a consultation with the Board of Taxation on this matter last week (details are below) and will be closely involved in this consultation.

It is worth noting there is a dissenting report from two of the Government Senators involved in the inquiry attached to the Committee's interim report. There are also an additional 7 recommendations from the Australian Greens Party attached to the interim report. The finalised report from the inquiry is due out on 30 November 2015.

There are a lot of moving parts to addressing the matter of ‘corporate tax avoidance', though there is one clear theme - a desire for some level of transparency by corporates over tax matters to be provided in some way, shape or form.
 
 
Stephanie Caredes CTA is a Tax Counsel of The Tax Institute.
 
The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

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