Australia eyes corporate tax transparency

Canberra wants to publish ‘tax payable’ of large companies

Large multinationals including Google and Apple could have their tax arrangements disclosed to the public as part of efforts by the Australian government to clamp down on profit shifting.

Under the proposals, set out in a Treasury discussion paper on Wednesday, the Commissioner of Taxation would publish the “tax payable” of any company with total income earned in Australia of A$100m ($105m) or more.

David Bradbury, assistant treasurer, said: “Increasing the transparency of the tax payable will enable the public to better understand the corporate tax system and engage in policy debates, as well as discourage tax-minimisation practices by large corporate entities.”

The push to improve the transparency of Australia’s business tax system is part of a broader effort by the ruling Labor government to crack down on tax avoidance and profit shifting.

The Australian Tax Office already collects data on total income, taxable income and tax paid by large corporates, but it is generally prevented from sharing it because of privacy requirements.

Pressure is mounting on large companies such as Google, which shift profits to tax havens or low-tax jurisdictions. This follows intense public scrutiny of the very low corporate tax liabilities of some foreign-owned multinationals.

Mr Bradbury last year attacked Google for exploiting different legal jurisdictions and using complex profit-shifting structures such as the “double Irish Dutch sandwich” to minimise its tax bill.

“There is a very big international debate occurring at the moment and Australia is playing an important part to try and ensure that some of the biggest and most profitable companies in the world pay their fair share of tax,” he told local media on Wednesday.

Releasing tax data is one of three proposals set in the discussion paper, which includes enhancing information sharing between government agencies. The commissioner of taxation would also release the mining or petroleum tax liabilities of companies such as BHP Billiton and Rio Tinto.

The government has been forced to defend its controversial mining tax, which generated just A$126m of revenues in its first six months of existence and is unlikely to make the A$2bn it was forecast to raise this year.

Mr Bradbury said: “One of the things that we’re proposing to do is to ensure that these antiquated provisions within the Tax Administration Act that seek to impose privacy requirements upon corporate entities – some of the largest entities in the world – are no longer relevant.”

Consultation on the discussion paper will close later this month, Mr Bradbury said. If the minority Labor government decides to accept the proposals, it will need the backing of independent MPs to get legislation through parliament.

Separately on Wednesday, Glenn Stevens, the governor of the Reserve Bank of Australia was reappointed for a further three-year term.

Treasurer Wayne Swan said: “I congratulate Governor Stevens on his reappointment, which acknowledges his enormous contribution to Australia’s economic resilience through his conduct of monetary policy, as well as his enduring focus on financial stability working together with our other key regulators.”

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