Australia Joins Push For Transparency With Public CbCR Plan

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The Australian government has announced plans to introduce public country-by-country reporting (CbCR) for large multinational corporations operating in the country. This move aligns with global efforts to increase transparency and crack down on tax avoidance by these companies.

Under the proposed rules, multinationals with global revenue of more than AU$1 billion would be required to disclose their operations and taxes paid in each jurisdiction publicly. The information would be made available on a government website and subject to review by the Australian Taxation Office.

This decision follows pressure from civil society groups and calls from other countries, including the European Union, for greater transparency in corporate tax practices. It also builds on Australia’s recent introduction of a Diverted Profits Tax and changes to its transfer pricing laws.

Before introducing Parliament’s legislation, the government plans to consult with stakeholders on the CbCR rules’ details.

“These measures will ensure multinationals pay their fair share of tax while also supporting the government’s commitment to open and transparent taxation,” said Treasurer Jim Chalmers. “We will not tolerate multinationals exploiting loopholes and shifting profits to avoid paying tax here in Australia.”

Critics argue that the measure does not go far enough, as it only applies to a small number of companies and does not address offshore tax havens. However, the government plans to continue working with international partners to tackle these issues and promote fair taxation.

“The government will continue working with the OECD and G20 on global solutions to address base erosion and profit shifting,” said Chalmers. “We will not stand by as multinationals unfairly dodge their tax responsibilities.”

The CbCR measures are expected to come into effect for the 2022-2023 financial year and affect approximately 1,500 companies operating in Australia. The government estimates it will raise an additional AU$200 million in tax revenues annually.

“These reforms will level the playing field for Australian businesses and ensure multinationals pay their fair share,” said Chalmers. “It’s about fairness in our tax system and ensuring all companies, big or small, pay their fair share.”

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