Monday, 14 September 2015
Tax and Superannuation Laws Amendment (Better Targeting the Income Tax Transparency Laws) Bill 2015; Second Reading
Firstly, I would like to thank those members who have contributed to this debate. This amendment exempts Australian owned private companies from having their tax affairs publicly disclosed. The passing of this amendment will ensure that there is greater public transparency of the tax affairs of companies but without risking the privacy, personal security and market environments of Australian owned private companies.
Private companies will still be required to provide the ATO with all the information relevant to making an assessment of their tax liability. If the Commissioner of Taxation has concern about the tax affairs of Australian owned private companies he already has the necessary information to take any action. This will not change the ATO's capacity to catch tax avoiders and will not affect company tax revenue collections. Australian owned private companies were swept up by this measure, which was proposed in the context of addressing potential tax avoidance by multinational companies.
As noted by Chris Jordan, the Commissioner of Taxation: 'If you look at the history of the matter, it was really for multinational companies operating here, disclosing quite low revenue.' The government is committed to combating tax avoidance and, while disclosure of taxpayer information can help, any action should be well considered and balanced and with the benefits outweighing the risks. We cannot be confident this is the case with Australian owned private companies. Submissions have clearly highlighted that the risks outweigh the benefits. Making the confidential details of these companies available will disproportionately risk their competitiveness, security and privacy.
There are better ways to strengthen the integrity of our tax system. The government's commitment to combating multinational tax avoidance was demonstrated in the budget. Australia is actioning the 2014 G20 OECD base erosion and profit-shifting action plan recommendations on country-by-country reporting, anti-hybrid rules, harmful tax practices and treaty-abuse rules. Our efforts go further than these BEPS recommendations. The government will shortly introduce into the parliament new multinational anti-avoidance rules to stop multinationals artificially avoiding a taxable presence in Australia and force them to pay tax, in Australia, on the profits deemed to have been derived from economic activities undertaken here.
We will also close a tax loophole and require foreign providers of digital products and services to Australian consumers to charge GST in the same way as domestic providers. The government will also double penalties for large companies that use tax avoidance and profit-shifting schemes. We have also asked the Board of Taxation to develop a voluntary code for greater disclosure by companies of their tax information. As foreshadowed in the budget, the government has signed an international agreement to enable information exchange under the OECD's common reporting standard to address tax evasion.
The government will also consider further action to address tax avoidance by multinationals, especially with the finalisation of the OECD base erosion and profit-shifting work later this year. The combination of these measures and this amendment strike the right balance between cracking down on tax avoidance and increasing transparency, without unduly risking the privacy, security and competitiveness of Australian family businesses. I commend this bill to the House.