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A majority of Australian companies incorporate tax strategies that directly conflict with ATO expectations, according to a new report and survey issued by international law firm Allen & Overy.
Majority of companies conflicting with ATO expectations
30 October 2015
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5 minute read
Of the 350 survey respondents worldwide, 71 per cent of Australian companies revealed that their current tax strategies do not adhere to ATO expectations.
In addition to their use of such strategies, 66 per cent of companies noted that minimising the tax rate was the main objective of their tax functions, and that there is a definite struggle to balance investor expectations with government attention.
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According to the report, an increasing number of corporations are now more concerned with compliance, instead of dedicating their efforts to achieving low tax rates.
Tax affairs are increasingly in the spotlight, with 70 per cent of Australian companies noting that media scrutiny of taxation had significantly increased – a higher percentage than any other country surveyed.
Juggling investor expectations with regulatory scrutiny and attention provides companies with “unprecedented challenges”, according to the report.
Allen & Overy tax counsel Ka Sen Wong stressed that with taxation issues firmly in the public spotlight, existing tax strategies have been a focal point for the government.
“Some taxpayers have viewed the transition positively," he said, "but for many, it has meant that long-standing tax planning measures are coming under increased scrutiny."
While noting that the importance of tax issues has been heightened, the report revealed that tax is now far more likely to be discussed at quarterly board meetings.
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