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Australia Explains Tax Disclosure Obligation On Largest Firms

Tuesday, February 12, 2019

The Australian Taxation Office (ATO) has issued an e-brief on how companies can assess if they are required to submit a reportable tax position (RTP) schedule.

The RTP schedule is a schedule to the company income tax return. It requires large businesses to disclose their most contestable and material tax positions.

The ATO said that it no longer issues notifications to every taxpayer who has to lodge an RTP schedule. It said that if a taxpayer matches the following criteria they will need to lodge an RTP schedule for years ending on or after June 30, 2019:

  • they are a public company or a foreign owned company;
  • their total business income is AUD25m (USD18.1m) or more in the current tax return;
  • they are part of a public or foreign owned economic group with total business income of AUD250m or more in the current or immediately prior year.

The ATO said that its definition of an economic group includes all entities (companies, trusts, and partnerships) that lodge an Australian tax return under a direct or indirect Australian or foreign ultimate holding company or other majority controlling interest.

The total business income of an economic group is the sum of "total income" labels reported in the latest tax returns for all members of the group.

The ATO will issue RTP notifications to Australian outposts of significant global entities that source substantial income in Australia but do not meet the above thresholds.

The ATO uses RTP schedule disclosures to tailor its engagement and work with taxpayers on complex high risk arrangements, and to identify areas where it needs to provide further clarification and certainty on the correct treatment of transactions and high risk arrangements.