Curtailing aggressive tax planning : the case for introducing mandatory disclosure rules in Australia (Part 1)

Abstract

Globalisation has increased opportunities for aggressive tax planning (ATP) schemes by multinational enterprises. However, tax administrations may not always have timely, targeted and comprehensive information about these schemes. This presents a struggle from a policy perspective, since most anti-avoidance laws are reactive – rather than proactive – in nature. One exception is the use of mandatory disclosure rules (MDRs), which require the upfront disclosure of tax information. These rules can provide governments with the transparency needed to respond more quickly to tax risks. This article explores the general case for introducing MDRs by (in part 1) presenting a case study of Australia’s experience in considering whether to adopt such a regime. This will be followed (in part 2) by a comparative legal analysis of how these rules apply in the UK and South African contexts, the experiences of which are informative in framing a regime suitable for adoption in other Commonwealth law jurisdictions such as Australia.