BEPS Australia Profile
1) Has Australia implemented any BEPS recommendations? If so, which Action Items?
Australia has incorporated all the new OECD guidelines arising from the BEPS project into Australian law in our latest federal budget. We also have specific legislation for Action 13.
2) What is Australia’s expected timeline for implementing country-by-country reporting?
It has been implemented and applies to periods starting after January 1, 2016.
3) If Australia has already implemented CbC, what has been the reaction from taxpayers?
The general public is supportive, but business sees this as a compliance burden. This is due to the requirement to submit a masterfile, local file and CbC report to the Commissioner within 12 months of year end (unless the masterfile and CbC report can be obtained by exchange of information). There is a $450,000 fine to fail to comply with these rules under the recent budget. Most other countries don't require this upfront submission to their tax authority.
4) What measures are multinationals in Australia taking to prepare for country-by-country reporting?
We've not really seen enough preparation by multinationals, although it's on their radar on discussions.
5) If Australia has already implemented CbC, what challenges are taxpayers facing or anticipated to face?
The compliance burden in Australia as mentioned above is the challenge of identifying potential risks in existing planning structures.
6) Are Australia’s taxing authorities taking any measures to prepare for any changes brought about by BEPS (e.g., changes in staffing, increases in budgets)?
The ATO is investing $700 million over four years in new resources in BEPS and other similar tax avoidance to get an anticipated $3.7 billion return.
7) How will country-by-country reporting affect how you provide services to your clients?
We anticipate having to do local files for overseas subsidiaries and also assist them in planning as it highlights substance risks in structures.