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Industry reacts to ATO transparency data

The accounting industry has issued its reaction to the latest corporate tax transparency data, claiming that it sheds little light on the tax affairs of companies involved, and further emphasises the complexity of Australia’s tax system.

Tax&Compliance Mitchell Turner 23 March 2016
— 1 minute read

Chartered Accountants Australia and New Zealand (CAANZ) stated that the release of private data spanning 321 entities should not be seen as indicative of tax avoidance behaviour.

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“Private companies are just that: private,” said Michael Croker, CAANZ head of tax.

“But their tax arrangements, as well as those of related entities and family members, are well known to the ATO and closely monitored.”

CAANZ has previously lodged submissions questioning the disclosure laws, arguing that the release of such limited information could not be described as transparency, and that a misinterpretation of the data itself may incorrectly suggest that the ATO is not doing its job.

Mr Croker added that the data released did not disclose the taxes paid by related entities and associated family members, “nor does the published data explain why a named entity has paid little or no tax”.

“That’s why the Commissioner of Taxation also had to publish general information about the tax law, which many have contributed to this outcome, such as carry-forward tax losses, high business deductions, or the tax-free treatment of dividends from offshore subsidiaries.”

Arthur Athanasiou, president of The Tax Institute, agreed that the data alone adds little value to understanding a private company’s tax position.

“They are a very small piece of the puzzle,” said Mr Athanasiou.

“However, the data is valuable for starting a line of inquiry into why our tax system is so complex that three seemingly simply headline tax numbers require pages of explanation for the public to understand them.”

He added: “Such clear evidence of the sheer complexity in our tax system alone should be enough to spur on the conversation on tax reform.”

Industry reacts to ATO transparency data
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Tax&Compliance