3rd Dec 2015, 6:49 PM – Senate Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015 - in Committee - Tax information of companies

The majority voted in favour of not insisting on amendment (3), which the House of Representatives had disagreed with.

What does this mean?

While considering the bill, the Senate proposed amendments, including amendment (3). However, the House of Represenatives disagreed with amendment (3) and so it was now up to the Senate to decide on whether to insist on the amendment (in which case, the bill would fail) or to accept the House's opinion.

What was amendment (3) and why did the House disagree with it?

The House of Representative's Reasons for Disagreeing to the Senate Amendments explained that:

[Amendments (1) and (3)] ... provide the Australian Taxation Office with a discretion to prevent the disclosure of the tax information of large Australian-owned private companies if it considers that the release of such information would be prejudicial to that entity’s commercial negotiations.

The intention of this Bill is similar to the intent of the House of Representatives in passing the Tax and Superannuation Laws Amendment (Better Targeting the Income Tax Transparency Laws) Act 2015. That is, to balance the need for greater public transparency in the tax affairs of large companies while not jeopardising the privacy and competitiveness of Australian owned private companies.

However, requiring the Commissioner of Taxation to assess whether the release of tax information may be prejudicial to an entity’s commercial negotiations is inappropriate. The Tax Office is not equipped with the expertise to assess the commercial sensitivities of company negotiations. The Senate amendment would require the ATO to divert resources away from its core activities, which is not in the public interest.

What does the bill do?

The bill strengthens the laws against tax avoidance for certain companies. For example, it introduces anti-avoidance measures to deal with multinational companies with an annual global income of more than $A1 billion that use schemes to avoid having to pay tax in Australia or at least reduce that tax to a minimum.

To learn more about the bill, see the bills digest.