Numerous significant entities, including PwC, other big four consultancies, and the American Chamber of Commerce in Australia, have called on Labor to put on hold Australia’s proposed multinational tax transparency laws.
“The scope of disclosures are significant, unique in cases and go well beyond any currently mandated public CBC reporting regimes globally,” it said. PwC called for the measure to be delayed until at least July 2025 or at least July 2026 “where disclosures go beyond existing public reporting regimes”
Multinational tax transparency laws postponed amidst concerns and submissions
The legislation aims to establish a world-leading system of country-by-country reporting, obliging multinational corporations to publicly disclose detailed location-specific financial information to discourage profit shifting and tax evasion.
Initially planned to commence in July 2023, the laws have been delayed by a year and are now set to take effect in July 2024.
Submissions made to the Senate in June disclose the requests for further delay, a reduction in the scope of information to be published, and less detailed disclosure about country-specific operations.
PwC and others have expressed concerns about the substantial compliance burden that the proposal could impose on multinationals, outweighing the benefits of disclosure.
They argue that Australia should align its regime with the European Union’s model, which only mandates reporting for EU member states and tax havens, thereby aggregating disclosure for other states.
Critics, such as Jason Ward of the Centre for International Corporate Tax Accountability and Research, contend that such lobbying efforts aim to maintain opacity and hinder true transparency.
The debate underscores the balance between tax transparency, corporate compliance costs, and the potential effects on the broader economy.
