When the whole world is running towards a cliff, he who is running in the opposite direction appears to have lost his mind.—C.S. Lewis, born in 1898
The value of staying active and sipping in taxing landscapes…
Big business has been criticised by the Australian Taxation Office for refusing to publicly disclose tax disputes and settlements worth “significant sums of money” to investors.
A senior Tax Office official said companies’ lack of disclosure was “particularly strange” and urged executives to follow the example of miner BHP by publicly revealing details of tax dispute settlements in their financial accounts.
The ATO settled tax disputes with 73 publicly listed and international businesses in 2020-21, collecting $1.09 billion of the $1.56 billion the ATO originally sought, according to its annual report.
Business said the ATO wanted more disclosure to show that the regulator is going after big multinational companies and to make an example of companies to pressure other firms on tax compliance.
It is easier, quicker and cheaper for the ATO to settle tax disputes, instead of drawn-out and expensive court cases that hinge on technical legal issues.
In a provocative speech, deputy commissioner Rebecca Saint demanded more transparency from big companies on tax disagreements in tax transparency reports, financial statements and possible press releases.
“Whilst we have seen positive trends in transparency of tax risks and tax profiles, disclosure of tax disputes to the community could benefit from greater transparency,” she said in a previously unreported speech delivered on November 23.
“We continue to see low numbers of disclosures of disputes in financial statements and tax transparency reports.
“We find it particularly strange where disputes are not disclosed in financial statements are subsequently settled for significant sums of money.
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