Tax payments of Rich List family businesses to be revealed in ATO dragnet

Tax payments of Rich List family businesses to be revealed in ATO dragnet

The amount of tax paid by private and family businesses is set to be revealed as part of changes to commence on July 1, 2015 designed to name and shame tax dodgers. 

The changes allow the tax commissioner to publish the tax details of companies with $100 million or more in total revenue.

Businesses have backed moves to increase the transparency of tax payments by multinationals such as Apple and Google, which have come under criticism for the amount of tax they pay in Australia.

But private family businesses will not be exempt from the laws which require publication of businesses name, AN, total income, taxable income and income payable.

A spokesperson for the Australian Tax Office told SmartCompany the measure does not extend to individuals, but there is no exception made for particular types of companies or businesses like family businesses.

“The ATO is aware of concerns held by some taxpayers and advisers that publishing this information may be misleading in some cases and is exploring ways to minimise the potential for any misunderstanding,” the spokesperson says.

For example, the spokesperson says the ATO could include basic general information about tax law concepts that affect calculation of tax payable by companies in the information.

Mark Reynolds, a principal at Crowe Horwath told SmartCompany there are “a lot” of private businesses which make more than $100 million.

“In that respect it is worrying for some of our clients that their entities turnover could be disclosed principally because those entities are not subject to any scrutiny at the moment,” he says.

“They are private businesses and private people who don’t like the idea of their personal affairs made available to the public, not because they don’t pay their fair share of tax but they don’t like to advertise exactly what they are doing.”

Reynolds says disclosure of this information has the potential to raise concern that some businesses are not paying their fair share of tax but may not reflect reality.

“Turnover is not necessarily reflective of profitability, there are plenty of companies out there with turnovers of over $100 million that are not necessarily profitable,” he says.

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