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2016-2017
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
TAXATION ADMINISTRATION AMENDMENT (CORPORATE TAX ENTITY
INFORMATION) BILL 2017
EXPLANATORY MEMORANDUM
Circulated by authority of Senator Gallagher
TAXATION ADMINISTRATION AMENDMENT (CORPORATE TAX
ENTITY INFORMATION) BILL 2017
OUTLINE
This Private Senators' Bill amends the Taxation Administration Act 1953 ('the Act'). Section
3C details the type of income and tax information the Commissioner of Taxation is required
to make publicly available annually for corporate entities.
This Bill amends Section 3C(1) to align the threshold for private corporate entities with that
of public corporate entities by lowering the threshold from $200 million to $100 million.
Public reporting of corporate entity tax information
The Australian Taxation Office publishes the Tax transparency: reporting of entity tax
information annually, starting in 2013-14. The report publishes:
• Australian public and foreign owned corporate tax entities with total income of $100
million or more
• Australian-owned resident private companies with total income of $200 million or more
• entities that have petroleum resource rent tax (PRRT) payable
• entities that have minerals resource rent tax (MRRT) payable (for the 2013-14 and
2014-15 MRRT years only).
In 2013, the Australian Government introduced and passed the Tax Laws Amendment (2013
Measures No. 2) Bill 2013. Among the amendments, the Bill introduced Section 3C
Reporting of information about corporate tax entity with reported total income of $100
million or more.
The measure was a significant advance in tax transparency that accompanied and
complemented other significant reforms to close tax loopholes used by large companies.
As originally passed, Section 3C was a tax transparency measure that aligned the thresholds
for public reporting of public and private corporate entities' basic tax and income information
at $100 million.
Section 3C was amended in October 2015 to completely remove private companies from
public reporting by the new government in the Tax and Superannuation Laws Amendment
(Better Targeting the Income Tax Transparency Laws) Bill 2015.
However, in December 2015, Section 3C was amended again to include private companies
(as part of the Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015),
however the threshold was $200 million.
No genuine policy rationale was given for either the removal of the public reporting
requirement for public companies, nor the restoration of the requirement with a significantly
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higher threshold. The $200 million threshold results in approximately 600 large private
companies (about two-thirds of those affected by the original measure) not having high-level
tax information scrutinised, unlike comparably sized public companies.
As noted in a Senate Economics Legislation Committee report Tax and Superannuation Laws
Amendment (Better Targeting the Income Tax Transparency Laws) Bill 2015[provisions], the
Australian Taxation Office "gave evidence during this inquiry that one in five private
companies earning over $100 million do not pay any tax".
In a context where aggressive tax minimisation by large companies and high net worth
individuals are under intense public scrutiny, this measure will restore the original public
reporting threshold for large private companies.
NOTES ON CLAUSES
Clause 1: Short Title
1. This clause is a formal provision specifying that the short title of the Bill, once
enacted, may be cited as the Taxation Administration Amendment (Corporate Tax Entity
Information) Act 2017.
Clause 2: Commencement
2. This clause provides for the commencement of the entire Act to be the day this Act
receives the Royal Assent.
Clause 3: Schedules
3. Each Act specified in a Schedule to this Act is amended or repealed as is set out in the
applicable items in the Schedule. Any other item in a Schedule to this Act has effect
according to its terms.
Schedule 1 - Amendments
Taxation Administration Act 1953
4. Schedule 1 of this Bill amends the Taxation Administration Act 1953 to align the
thresholds for public reporting of public and private corporate entities' basic tax and income
information at $100 million.
Item 1 - Subsection 3C(1)
5. This item repeals the current wording of subsection 3C(1), and substitutes it with
language that ensures corporate tax entities (including private companies) with total income
equal to or exceeding $100 million are subject to the public reporting requirements of section
3C.
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Item 2 - Application of the amendment
6. This item clarifies that the amendment made in Schedule 1 applies to the 2017-18
income year onwards.
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Taxation Administration Amendment (Corporate Tax Entity Information) Bill 2017
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Overview of the bill
This Private Senators' Bill amends the Taxation Administration Act 1953 to align the
threshold for private corporate entities with that of public corporate entities by lowering the
threshold from $200 million to $100 million
Human rights implications
This Bill does not raise any human rights issues, as the amendments contained therein do not
affect individuals.
Conclusion
This Bill is compatible with human rights as it does not raise any human rights issues.
Senator Gallagher
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