Tax transparency is not just about tax

Abstract

All Australian corporates with turnover in excess of $100 million have to consider how they will respond to Australia’s Tax Transparency Code (TTC). This is in addition to the Extractive Industries Transparency Initiative and other overseas tax transparency regimes. And, in considering the how, many corporates are seeing the opportunity to showcase the significant contributions their enterprise contributes to the economy which invariably goes beyond the amount of corporate income tax and resources taxes they pay. Once a corporate taxpayer discovers that tax transparency disclosure can actually deliver benefits to their organisation, the questions turn to what to disclose and in what time frame. Ultimately they need to design tax transparency disclosures which are aligned to company objectives, meet mandatory and voluntary requirements, explain the business context around tax payments and clearly communicate the economic benefits of the enterprise to key stakeholders. This requires the input of the tax function, but is as much about the organisation’s reputation in the eyes of its stakeholders and therefore requires an organisation wide view. There is a range of options and it is for each impacted company to assess what they want to achieve from tax transparency ... and it is not just about tax.