Australian companies facing their second year of reporting under new anti-tax avoidance laws are being warned to avoid inconsistencies with publicly available business information, reports the Australian Financial Review.
Obligations under the ATO’s base erosion and profit shifting action plan rules (BEPS) include local and country-by-country filing, with fines of up to $525,000 for anyone providing incorrect or incomplete information.
Conservative estimates by the Organisation for Economic Co-operation and Development suggest that revenue loss due to BEPS activity around the world could be worth between US$100 and $240 billion every year with multinationals exploiting gaps and inconsistencies across jurisdictions and artificially shifting profits to low or no-tax jurisdictions despite having little or no economic activity there.
Thomson Reuters’ Transfer Pricing Product Specialist, Joanne Ting, said that despite some simplifications from the ATO, the rules remained onerous for some local operators facing increased scrutiny in year two.
“A lot of small Australian subsidiaries of overseas headquartered companies are impacted,” she said.
“The rules catch companies who make a global turnover of over $1 billion but for an Australian company, they could be quite small here but still be caught by these rules. It can be quite onerous for small companies like those.
“The year two changes are giving people even less certainty because the ATO introduced new questions.”
Many companies don’t know how to go about providing the required information and online guidance from the ATO had been changed without warning, Ms Ting said.
“I think they’re trying to help people lodge these statements and provide correct information but they’re making quite a few modifications.
“Business should be careful what they put into their reports is consistent with what is in the public space, in terms of annual reports. They should make sure it is consistent so the ATO can’t pick it apart.”
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