Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I thank Senator Whish-Wilson for his contribution. The government does not support this amendment or the amendment circulated by Senator Xenophon. This is not a loophole. Imposing a requirement that an entity must prepare general purpose accounts would be, in our judgement, an excessive compliance burden, because much of this information would be utterly irrelevant for tax compliance purposes.

The commissioner already collects a significant amount of information that relates to taxpayers on the tax return form. To the extent that more information would be helpful for the commissioner to independently administer the tax law: he already has very broad powers to require this to be produced and he can obtain that information. The commissioner already has sufficient and significant powers under his general information gathering powers. The commissioner can already require further information to be included on the income tax return to the extent that it is useful for tax compliance purposes.

The key difference between the general purpose accounts and the special purpose accounts is that additional information on related party transactions is provided. This information is already available to the commissioner, as it is disclosed in the international dealings schedule attached to the income tax return. Let me just say that again very slowly: this information is already available to the tax commissioner as it is disclosed in the international dealings schedule attached to the income tax return.

The proposed country-by-country reporting standards already provide detailed information to the tax office on international profit-shifting. Nothing further would be gained by requiring an entity to prepare another set of general purpose accounts. General accounts would only reveal Australian entity information, so what you are proposing does not go as far as what is already in train. The draft country-by-country rules go further and require accounting information from all the entities in a multinational group. The country-by-country legislation is already best practice and consistent with OECD best practice for mandatory transfer pricing information to be provided to the tax office.

The OECD debated whether to make country-by-country transfer information public. It was determined that this should not be made public. Doing this for tax purposes would go beyond best practice and, as such, the government is not going to support this proposal by the Greens and Senator Xenophon.