Date posted: 1/07/2019 5 min read

Tax transparency – are we there yet?

Has tax transparency been achieved?

In brief

  • Measures have been implemented to address the perceived lack of transparency in the amount of tax corporates pay.
  • These measures have increased tax transparency disclosures
  • But there are mixed indicators as to whether tax transparency has been achieved

There have been a raft of measures implemented in recent years to address the perceived lack of transparency in the amount of tax corporates actually pay. In Australia, the Board of Taxation has proposed a revised "voluntary" tax transparency code, which increases the level of disclosures in financial statements and tax transparency reports on the nature and types of taxes paid. The Australian Taxation Office (ATO) has also issued revised guidance on the type of general purpose financial statements that are required to be prepared for significant global entities. With companies beginning to evaluate the impact of the new Interpretation 23 Uncertain tax positions on their financial statements and reportable tax position schedules, this may in addition highlight certain tax treatments that have not been disclosed previously.

In this article, Ben Seumahu, CA, Director, Department of Professional Practice at KPMG, looks at each of these measures, and considers whether or not tax transparency has been achieved in the Australian context or whether there is room for improvement.

There is no doubt the level of tax transparency disclosures has increased significantly over recent years, however there are mixed indicators as to whether tax transparency is being achieved or whether there is room for improvement. The relatively slow take-up of the voluntary tax transparency code has meant there are still many companies yet to fully embrace the measures, although most of the corporate tax base is well covered, and information on taxes paid is available through ATO public data releases.