This submission addresses Australian corporates’ compliance with tax requirements under the current law.

Executive summary

Most corporates pay the tax they are required to under Australia’s law. Some private groups, linked to wealthy individuals with complex group structures, display more aggressive tax behaviours and characteristics. Some multinational enterprises engage in complex profit shifting structures. These present tax avoidance risks that threaten the level playing field of business.

The ATO is an active and visible regulator with a well-educated and experienced workforce administering internationally respected law. We work co-operatively with other revenue authorities and make risk-based decisions about how our resources are used to administer the tax system. Recent staff reductions have been managed to ensure there is no material impact on our frontline expertise or capability.

We monitor the system closely and work with Government and Treasury in relation to any changes required to ensure the health of the tax system and its administration. Reforms have been implemented to improve transfer pricing and thin capitalisation rules in Australia, as well as globally the ATO is supporting the G20/OECD to drive 15 action items to address base erosion and profit shifting. We are also undertaking tax gap measurement to assist in providing another insight into the health of the tax system over time.