Your tax affairs in the public spotlight: Tax transparency
In recent years, pressure has been mounting for large corporates, particularly multinationals, to be more transparent about their tax affairs. The Organisation for Economic Co-operation and Development (OECD) is developing a number of initiatives as part of its 15 point action plan to combat “base erosion and profit shifting” (BEPS), including greater transparency. Further, Australia is continuing to develop transparency measures.
On 12 May 2015, the Treasurer announced that the Government is committed to greater transparency in commercial dealings of large multinationals to prevent tax avoidance through tax loopholes and profit shifting. In addition, the Government will work with business to develop a Voluntary Corporate Disclosure Code directed at greater public disclosure of tax information by large corporates.
A more pressing issue for large corporates is the enacted tax transparency measures, first expected to be published in late November or early December 2015. The transparency measures require the Commissioner of Taxation to report limited details about the tax affairs of corporate tax entities that have total income of $100 million or more in an income year.
Once the Commissioner’s report is published, large corporates can expect the media to examine its contents. They can also expect their tax affairs to come under scrutiny from a range of other stakeholders. Now is the time for Boards to plan how they will prepare for and respond to this increased scrutiny.
Explore the complete Federal Budget 2015-16 website to read more.