The Minerals Council of Australia (MCA) Tax Forum, hosted by KPMG, focused on the issues of tax transparency and governance.
On 16 September 2016, KPMG hosted the Minerals Council of Australia's (MCA) tax forum discussion group on the topic of 'Tax transparency' and 'Tax governance'.
These sessions are part of a new series of tax forum discussions organised by the MCA to enable its members to keep abreast of tax developments and share experiences and insights.
On the topic tax governance, the main focus was the current draft of the Australian Taxation Office's (ATO) Handbook for Directors (Handbook) on their Tax Risk Management and Governance Review Guide (Guide). From the discussions, it was clear that for mining companies, tax is only one aspect that needs to be considered when assessing organisational risks as a whole.
The current draft of the Handbook reflects industry feedback but has also been subject to further consultation. Three key observations so far are:
Although there is still some debate over the ‘better practice’ examples, the Handbook, as currently drafted, has generally been welcomed by directors. We expect the ATO will finalise and publicly release the Handbook soon, together with a set of self-assessment procedures.
Boards are already being challenged on their oversight of tax risk, but the release of the new Handbook will raise the bar even higher.
In our view, there are two key areas that we believe boards and audit committee members will have at the top of their agenda as they take steps to respond to the ATO’s new approach to tax risk management and governance. These areas are the preparation of an implementation plan and consideration of the broader organisational impact.