Hockey, G20 to hit tax avoidance

Treasurer Joe Hockey has announced Australia will implement a new tax reporting standard from 2017, as part of a global initiative to tackle tax avoidance led by the G20.

It follows agreement on the 'base erosion' and profit-shifting action plan at the G20 last year, and the first tranche of this work is expected to be delivered by the OECD this weekend.

The treasurer said the action plan would help secure revenue bases by limiting opportunities for double non-taxation and ensuring a coordinated global approach to taxation.

“We are half way through an ambitious two-year work program to update international tax rules for the 21st century,” Mr Hockey said.

“This work will help ensure that tax is paid where profits are made.

“This has never been straight forward and, in a digital economy, this is increasingly difficult.”

The Australian Taxation Office has clamped down on tax evasion, with extensive audits to multinational companies taking place recently and an initiative to encourage voluntary disclosure before the end of the year with reduced penalties.

“Supporting greater tax transparency and information exchange is a key way to crack down on tax avoidance and evasion,” Mr Hockey said.

The G20 is expected to endorse a finalised reporting standard for automatic cross-country sharing of tax information.