At an Australian Senate Estimates hearing on October 25, 2017, Australian Tax Commissioner Chris Jordan was asked to respond to calls for making country-by-country (CbC) reports public. He was asked whether releasing those reports to the public would be of help to the Australian Taxation Office (ATO).
Mr. Jordan said if the reports were required to be made public, the ATO “wouldn’t have any reports to release, because no-one would give us any.” The arrangement tax authorities, including the ATO, have through the OECD is encapsulated in a multilateral agreement. That agreement is based on the information that is exchanged. The information is to be kept within the confines of the relevant tax authorities, the Commissioner said. “People call for this to be made public – no-one would give us anything, so there’d be nothing to make public. We’ve signed up to an international agreement, as with [other countries], to say that this will occur as long as the information is only provided to tax authorities.”
The Commissioner was asked what he considered was the value to the ATO and to the government of receiving that information. He replied: “It’s of enormous value! … our people think it is of enormous benefit to get that level of detail, which we’ve never had before, in a proactive way. We might get this sort of stuff after lengthy audits, many information requests and all that sort of thing, but this is transformational in our international tax work.”
Jeremy Hirschhorn, ATO Deputy Commissioner, Public Groups advised that the ATO had now received about 300 CbC local files, and had received its first (this is several months early) full CbC file. “It is exceptional information and exceptional transparency. In the discussion about tax transparency, it’s very important to distinguish between information that the tax office has -transparency of taxpayers to the tax office – and transparency that taxpayers have to the community. What we’d say is: when we have the information we can do our job. Transparency to the public is a good thing, but, around country-by-country reporting, as the Commissioner said, with the international consensus to gain that information, it would be a shame to kill the golden goose.”
The Commissioner strongly agreed with a comment by Australian Senator Bushby that the ATO protects the privacy of taxpayers, whilst acknowledging the need for taxpayers to be fully transparent with the ATO, because in the absence of respect for that privacy, “you might not get the information you need” to make accurate assessments.
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This article originally appeared in Thomson Reuters Voice on the Forbes website.