COUNTRY – BY – COUNTRY REPORTING: A NEW DIMENSION IN TAXPAYER COMPLIANCE OBLIGATIONS IN AUSTRALIA
Abstract
The G20/Organisation for Economic Co-operation and Development’s (OECD’s) Base Erosion and Profit Shifting Action Plan (BEPS Action Plan) aims to combat tax evasion through an effort to improve tax transparency and enhance the exchange of information and co-operation between tax authorities, governments and global entities. As part of the BEPS Action Plan’s recommendations on transfer pricing documentation, country-by-country reporting (CbCR) requirements have been introduced in many countries, including Australia. This paper analyses the Australian CbCR legislation and the impact of compliance requirements on large multinational consolidated groups in Australia. The paper reflects on CbCR issues that include and transcend the taxation sphere, such as general business reporting and corporate governance, as well as the consequences of failing to comply with CbCR obligations. The discussion underlines the need for a cohesive global cooperative effort involving tax authorities and taxpayers. It also raises the need for reporting entities to make the necessary governance adjustments in order to comply with the CbCR obligations, which will support the objectives outlined in the BEPS Action Plan.