Tax laws discriminatory against private companies — Lawyers
The Law Council of Australia has strongly backed Government legislative amendments which would exclude Australian private companies from tax transparency laws aimed at large multi-nationals.
In a submission to a Senate Committee of inquiry into the legislative changes, the Law Council said it supported the changes which would "operate to alleviate that harshness, injustice, and discrimination against a significantly adversely affected class of taxpayers — namely, private Australian companies".
The submission said that in the absence of such amendments the existing legislation "displaces the fundamental and long-held tenet of Australia's tax laws that a taxpayer's affairs must remain private between them and the Australian Taxation Office".
"The publication of private taxation information of particular corporate tax entities discriminates against such affected companies and other corporate taxpayers," it said.
"Trusts and partnerships which are not taxed as companies (the great majority of trusts and partnerships), and even individuals, are not subject to section 3C [of the legislation]."
The submission said this "injustice" was further exacerbated for private Australian companies by the fact that the Australian Securities and Investments Commission (ASIC) maintained a public register of companies, and a simple ASIC search could identify the shareholders of the private companies that were subject to the tax disclosure laws.
"This does not apply to public companies or foreign companies," it said.
The Law Council submission said the ability to identify the individuals or families associated with private companies would not only draw further attention to such persons but would likely result in the general public falsely assuming that the income of those private companies was the income of the individuals or families behind those companies.
"The right to the privacy of those individual shareholders is therefore undermined," it said.
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
