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
Government has introduced a bill to Parliament to legislate the first stream of the QAR reforms.
ASIC now has a 1:1 ratio when it comes to court success in the enforcement of crypto activities and more action is expected as Treasury seeks to introduce a regulatory framework.
A leading governance body has hit out at “specialist interest groups proposing ad hoc law reform” when it comes to reforms of financial services legislation and believes an independent body is needed.
The release of ALRC’s final report into financial services legislation has highlighted financial advice as a “significant” focus as it seeks to reduce costs and help advisers understand their obligations, alongside the Quality of Advice Review.
