Tax and Superannuation Laws Amendment (Better Targeting the Income Tax Transparency Laws) Bill 2015
Friday 28 August 2015 @ 9.21 a.m. | Taxation
The Parliament of Australia has introduced the Tax and Superannuation Laws Amendment (Better Targeting the Income Tax Transparency Laws) Bill 2015 into session after being made available as a draft for consultation in July this year (2015). The Bill ensures that public disclosure of information by the Commissioner of Taxation under the income tax transparency laws does not affect the privacy and personal security of the ultimate owners of Australian-owned private companies. It also removes the risk that such disclosure of the information will harm Australian-owned private companies’ market environments.
Tax Transparency Laws
Tax transparency was introduced in 2013 as a way an organisation communicates its approach to tax and to the amount of tax it pays. Under the laws, the Australian Tax Office is required to report information about a corporate tax entity if it has a total income of $100 million or more. Information to be disclosed includes the entity’s name and ABN, its total income, its taxable income and its tax payable.
These measures have the objective of discouraging large corporate entities from engaging in aggressive tax avoidance practices while at the same time provide information to inform public debate about tax policy. It allows the ATO to exchange information with other tax administrations on preferential tax regimes in order to identify secret tax deals provided to multinational corporations by other countries that may contribute to tax avoidance in Australia.
The Current Bill
The current Bill will ensure that the release of information by the Commissioner of Taxation under the income tax transparency laws does not jeopardise the privacy, personal security and market environments of Australian owned private companies. In essence, the Bill attempts to redress the balance of the 2013 legislation that the Government accuses of abrogating the fundamental right to confidentiality. Assistant Treasurer Josh Frydenberg argued that “the information to be disclosed, already in the hands of the Australian Taxation Office, will not help the ATO in assessing additional tax.”
He further argued that for closely held Australian owned private companies, the publication of company tax affairs would effectively reveal the owners’ private financial affairs. Consequently, the amendment introduced by the Bill aims to ensure that publicly listed companies and foreign owned private companies would continue to have information published, but it will ensure a balanced approach to the public disclosure of companies' tax affairs.
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