I recently presented a paper at The Tax Institute’s NSW Annual Tax Forum, in which I considered some of the key corporate tax transparency developments – in Australia and around the world.
Corporates currently grappling with the 'voluntary' tax transparency code (TTC), Country-by-Country (CbC), Common Reporting Standard (CRS) and other disclosure initiatives may find it useful.
The paper is set out in five parts:
- Part 1 reviews the '$100m mandatory disclosure' rule, including its history, the politics of disclosure, and the compromise for Australian owned private companies. The experience with the 2014 year disclosure is considered - as are some of the shortcomings of this mandatory disclosure.
- Part 2 reviews the 'voluntary' TTC as recently endorsed by the Government. The paper tracks the Board of Taxation’s December 2015 consultation paper to the key industry submissions and then to what we have to work with today. Is the TTC really voluntary? Should my company opt-in? If so, how and when to disclose?
- Parts 3 and 4 provide an overview of CbC reporting and the CRS respectively. The paper identifies some of the key practical issues facing taxpayers attempting to implement these measures.
- Part 5 briefly discusses several other global trends around tax transparency, including the incidence of 'leaking, several of the Base Erosion Profit Shifing (BEPS) Actions, and Australia’s recently released consultation paper regarding the disclosure of aggressive tax arrangements.
The Australian journey of public tax transparency is incomplete. This paper just tells the story so far.