The Business Council of Australia (BCA) welcomes the opportunity to provide this submission to the consultation on Simplifying the Voluntary Tax Transparency Code (VTTC). Simplifying the reporting and compliance burden associated with the operation of corporate tax system should be an important element of the broader productivity agenda currently being pursued by the Federal Government.
The Business Council strongly believes all companies and individuals must meet their tax and legal obligations and continues to encourage member companies to adopt the Voluntary Tax Transparency Code. There are over 50 BCA member companies that have signed up to the Code and BCA member companies paid around $40 billion of company tax in 2022-23, or around 26 per cent of all company tax paid.
The Tax Transparency Code has been an important addition to Australia’s robust suite of tax integrity and transparency measures, which are “some of the most robust tax integrity rules in the world.” Large companies demonstrate a high level of compliance and paid around $98 billion of income tax in 2022-23 or around two-thirds of all company tax paid. The ATO has consistently highlighted its confidence in the tax compliance of large corporate groups.
The BCA supports the intent of the redesign, which is to update and simplify the code. Specifically, the revisions seek to minimise reporting duplication with new mandatory reporting frameworks like public country-by-country (CbC) reporting and to reflect changes in the broader tax transparency regime that have commenced since the VTTC was first introduced in 2016.\
Flexibility in reporting format and the timing of reporting should be the main principles informing revisions. Ease of compliance will encourage further adoption of the Code.
The BCA also notes the importance of the Code remaining voluntary in both form and in substance.
The reconciliation between the three ATO tax transparency numbers and the VTTC numbers should also be optional, not a requirement.
The linking to the public CbC reporting data should also be an option rather than a requirement for VTTC reporting.
The BCA would welcome the opportunity to discuss any aspects of this submission in further detail as part of the Board of Taxation’s consultation, with the long-term objective of consolidating transparency reporting arrangements in conjunction with future corporate tax reform efforts.