On 3 May 2016, as part of the Federal Budget measures on stronger compliance, the Government announced that it was committed to a new voluntary Tax Transparency Code (Code) for large businesses.
The Code, also released by the Board of Taxation (BoT) on Budget night, is very similar to the original proposal contained in the Consultation Paper released in December 2015. The Code includes the retention of an ‘ideal’ start date from the 2016 reporting season and the disclosures divided into:
The Code applies to privately-owned Australian companies as well as foreign owned and public companies operating in Australia.
The BoT has recommended that corporate boards and senior management should actively participate in the decision to adopt the Code and on the level of disclosure to be embraced.
The Government has endorsed this new framework for tax transparency reporting to support greater and better informed public scrutiny of the corporate sector. A great deal of flexibility is built into the framework to allow businesses to decide on the best approach to publish the desired information.
Boards and management should consider the Code and their other reporting obligations for the 2016 reporting season to determine the most beneficial approach to make disclosures.