Yesterday, the Senate Economics References Committee released an interim report on the Senate Inquiry into corporate tax avoidance and aggressive minimisation.
The Interim Report outlines a range of recommendations regarding:
- efforts to combat tax avoidance and minimisation;
- evidence of tax avoidance and minimisation;
- areas where to take action to protect Australia's revenue levels; and
- the ability for government agencies to collect corporate taxes.
The main recommendations include:
- Implementation of a mandatory tax reporting code as soon as possible. This would require Australian corporations and subsidiaries of multinational corporations, with annual turnover over a specific figure, to publicly report financial information;
- Establishment of a public register of tax avoidance settlements reached with the ATO;
- ATO and other agencies, should release an annual public report on tax avoidance and aggressive tax minimisation;
- Companies tendering for government business required to reveal their country of domicile for tax purposes;
- Mandatory notification by agencies to a Government Minister about contracts above a specified figure that are given to companies who are domiciled overseas for tax reasons;
- ATO to be independently audited;
- ATO to report annually to parliament on audits and tax disputes with multinational corporations;
- Modification to taxation legislation to ensure non-reporting entities are required to disclose related party information in financial reports;
- Modification to the ASIC Act to allow information sharing with the ATO without notifying the affected individual; and
- Australian Government to work with Governments of other countries to increase the transparency of information about taxation and inter-related party dealings.
The Interim Report underscores a growing push for greater transparency into the affairs of large multinational taxpayers, and echoes recent developments in other advanced economies in targeting multinational tax avoidance.