The Albanese Government is committed to improving compliance, closing tax loop-holes and enhancing transparency to ensure that there’s money for the services Australians expect.
The Australian Taxation Office (ATO) has today published their annual 2020‑21 Corporate Tax Transparency Report, disclosing the tax performance of 2,468 corporate entities operating in Australia.
Australians rightly expect all taxpayers, from the largest multinationals to individuals, to pay their fair share of tax. The ATO’s report provides insights about the corporate tax system and the tax performance of multinationals and large public and private businesses.
The Albanese Government has committed $1.1 billion in funding for the ATO Tax Avoidance Taskforce over the next 4 years. This investment will help the ATO continue to crack down on tax dodging by multinational enterprises, large Australian public and private groups, and wealthy individuals operating in Australia.
Australia remains engaged with the ongoing efforts of the OECD to develop further rules to address the tax challenges associated with the digitalisation of the economy and to establish a global effective minimum rate of tax for large multinationals.
As part of the Multinational Tax Integrity Package the Albanese Government is taking a range of measures to tackle multinational tax avoidance.
This includes introducing new tax transparency requirements that will commence from 1 July 2023. Public companies will need to disclose where their subsidiaries are based, large multinationals will need to disclose certain information on a country by country basis and their approach to tax, and tenderers for large government contracts will need to disclose their country of tax domicile.
Starting from 1 July 2023, large multinationals will no longer be able to claim deductions for payments made to related parties in relation to intangibles held in low or no tax jurisdictions. This will help to ensure that multinationals that use intellectual property in Australia, pay appropriate tax in Australia. It is estimated that over the forward estimates this will increase receipts by $250 million.
The Albanese Government is also taking action recommended by the OECD to limit the debt deductions multinational firms can claim for interest payments. Over the forward estimates it is estimated this measure will increase receipts by $720 million.
The report is available on the ATO’s website.
Quotes attributable to Stephen Jones, Assistant Treasurer and Minister for Financial Services:
“Australians expect everyone in our tax system to pay their fair share.”
“Today’s transparency report helps the public and the government understand how the system is working and where the gaps are.”
“We invested in increasing tax compliance in last week’s budget and this data will help us target that additional funding.”
Assistant Minister for Competition, Charities and Treasury Andrew Leigh:
“The publication of this data provides the community with a better understanding of how much tax large corporates pay. Improving transparency is important to ensuring that multinational companies can be held to account.”
“This corporate tax information is only in the public domain because of reforms passed by the Gillard Labor Government. The Albanese Labor Government recognises that there is more to be done on improving transparency. At the last election, we won a mandate to improve tax transparency by listed corporates, government tenderers and billion-dollar multinationals. We are committed to delivering on this promise.”