05 Apr 1313 Preamble - 5 April 2013
This week the Federal Government released a discussion paper on three transparency proposals, including the public disclosure of taxes paid by corporate entities with an annual income greater than $100 million. Disclosure will include the company’s name, ABN, total income, taxable income and tax payable.
Australia’s current international tax rules are based on out-dated concepts of source and residence. It is important that the Government focuses on revising our international tax rules in conjunction with our major trading partners to make sure that Australia collects an appropriate share of corporate tax.
Tax transparency may assist revenue authorities and policy makers to stay ahead of the curve. It may also better inform the Australian public.
However, tax transparency also risks causing widespread confusion.
By simply disclosing headline income and tax numbers, companies that have acted legitimately risk being unfairly tarred with the tax avoidance brush unless the Government fully explains the numbers.
It may also impact upon small businesses, as the $100 million transparency threshold is well within the Tax Office’s definition of SMEs, which is: those with a turnover of between $2 million and $250 million.
The Tax Institute will be formally contributing to the consultation on the Government’s proposals and any thoughts you would like to feed into this process are most welcome (our e-mail address is: email@example.com)
Robert Jeremenko CTA
As TaxVine goes to print the Federal Government is announcing its superannuation changes. Please refer to the Minister’s website for further details.