BEPS Action 12 – Disclosure of Aggressive Tax Planning

BEPS Action 12 “Mandatory disclosure rules” aims to require taxpayers to disclose their aggressive tax planning arrangements. This will be addressed through the development of recommendations regarding the design of mandatory disclosure rules for aggressive or abusive transactions, arrangements, or structures, taking into consideration the administrative costs for tax administrations and businesses and drawing on the experiences of the increasing number of countries that already have such rules.

Australia’s response 

The Australian Government is undertaking consultation on the implementation of mandatory disclosure rules for taxpayers and tax advisors.

The Government has not yet responded officially to the BEPS Action 12 recommendations.

However, on 3 May 2016, the Government announced that it will seek community input on the OECD’s proposals for Mandatory Disclosure Rules, which require tax advisers and/or taxpayers to make early disclosures of aggressive tax arrangements (often before income tax returns are lodged), to provide tax authorities with timely information on arrangements that have the potential to undermine the integrity of the income tax system.

The purpose of this paper is to seek community views on how Mandatory Disclosure Rules should be framed in the Australian context, having regard to the disclosure rules that are currently available to the Australian Taxation Office.  The paper also provides an outline of the OECD’s key recommendations, and the Government’s preliminary views in relation to those recommendations.