Australian Government Misses Deadline for Public CbCR as OECD Faces Lobbying Allegations

The Australian government's plan to introduce mandatory public country-by-country reporting (CbCR) has hit a setback as it failed to meet its own deadline for legislation on June 22. However, the proposal remains an important item on the political agenda, with ongoing efforts to refine and align it with the European Union's public CbCR regime.

Andrew Leigh, assistant minister for competition, stressed the government's commitment to the proposal, stating, "Over the coming months, we will further engage on the appropriate level of disaggregated reporting. This will build on refinements we have already made to align more closely with the European Union's public country-by-country regime."

However, there are allegations from non-governmental organizations (NGOs) that the Organisation for Economic Co-operation and Development (OECD) has been lobbying against the ambitious Australian proposal. Alex Cobham, chief executive at the Tax Justice Network, expressed concerns, stating, "The suggestion that the OECD interfered in a country's decision to promote tax transparency is extraordinary, and the organization must provide a full, public explanation of its role here."

The Centre for International Corporate Tax Accountability and Research (CICTAR) warned against diluting the original proposal and urged the government to resist corporate pressure. Jason Ward, principal analyst at CICTAR, claimed, "The Albanese Labor government should not bend to corporate bullying and must enact this landmark transparency legislation as soon as possible, without watering it down."

Prime Minister Anthony Albanese's government made tax transparency a key focus during the 2022 federal election campaign. They promptly initiated the development of the CbCR proposal, which was first announced in October 2022. However, consultations held in August to September and again in April 2023 faced criticism for providing limited time for taxpayers to provide feedback.

During the April consultation, taxpayers were asked to comment on amending CbCR using the Global Reporting Initiative (GRI) 207 tax standard as a reference model. Bill Barton, public officer at BP Australia, recommended that the government follow the EU or OECD approach to public CbCR, stating, "Such an approach would avoid disproportionate compliance burdens for taxpayers, without undermining the policy intent of the proposal."

Parliament's recess has interrupted the legislative process, and the proposal will need to be reconsidered when Parliament reconvenes on July 31. The Albanese government is expected to continue its efforts in advancing public CbCR and pursuing other tax reforms. The government remains receptive to the concerns of tax directors and stakeholders, and their input will likely influence the government's decision-making process on compliance and risk management.

By fLEXI tEAM