The Senate Inquiry Interim Report
An interim Senate Report (the Interim Report) entitled “You cannot tax what you cannot see” on the Inquiry into corporate tax avoidance was released on 18 August 2015, making 17 recommendations focusing on tax transparency and financial reporting issues
- The two Government Senators dissented from some recommendations of the Interim Report citing a failure to recognise recent actions taken by the Government. In contrast the Australian Greens fully support the Interim Report and made additional transparency and financial reporting recommendations.
- Although the Interim Report makes reference to debt loading issues, no specific recommendations were made
The final Report is expected by 30 November 2015 with further public hearings expected before then. The Interim Report states that the final Report will focus primarily on transfer pricing and profit shifting with a secondary focus on debt loading, permanent establishments, tax havens, special purpose accounts and the role of accounting firms
- The Interim Report should be read within the context of the significant shifts in the tax transparency, Australian and international tax landscapes in recent months
- The heightened media focus that has surrounded the Inquiry and its public hearings has, to date, already served to shine a light on some cross-border tax practices being targeted by the OECD BEPS action plan, and the ongoing activities of the ATO
- Australia is already firmly committed to increased tax transparency rules, being an early adopter of country-by-country reporting and is also taking unilateral action against the avoidance of permanent establishments (PEs) in Australia with the multinational anti-avoidance law (MAAL) announced in the 2015 Federal Budget.