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Australian Tax Board Releases MNE Tax Transparency Code

by Mary Swire, Tax-News.com, Hong Kong

15 December 2015


On December 11, 2015, the Australian Board of Taxation released for public comment a discussion paper on a new voluntary tax transparency code (TTC) for multinational corporations.

As part of the 2015 Budget, Australian Treasurer Joe Hockey wrote to Michael Andrew, Chair of the Board, asking for the body to lead the development of a new code that would require greater public disclosure of tax information by large businesses by May 2016.

The consultation paper includes the Board's preliminary findings and recommendations to the Government.

The paper states: "The Board believes that it is in the interests of businesses, particularly large multinationals, to be more transparent about their tax affairs. The Board's proposal for a TTC is therefore a set of principles and 'minimum standards' to guide disclosure of tax information by businesses. The Board expects that the TTC will evolve over time in response to changes in the legal and commercial environment, and changes in corporate governance practices."

The paper recommends that the TTC disclosure should be delivered in two parts, by improvements to the disclosures of tax information in financial statements (Part A), and an annual "taxes paid" report (Part B). The paper recommends that "large businesses" (with aggregated TTC Australian turnover of over AUD500m) should adopt both parts; and "medium businesses" (with aggregated TTC Australian turnover of at least AUD100m/USD72.5m but less than AUD500m) should adopt Part A.

The report states that businesses may also elect to satisfy the "minimum standards" of the Australian TTC by publishing the required information as part of other public disclosures. It states that the reports do not need to be externally audited, because it is expected that businesses obtain significant assurance on the content through existing external and internal audit or review procedures. The report also does not recommend any additional oversight or penalties for misleading disclosure of TTC information.

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