The Inspector-General of Taxation (IGT)has concluded that overall, the agreed recommendations in a number of IGT reviews into the ATO have either been implemented by the ATO, in whole or part, have prompted ATO action toward the realisation of intended improvements or will be examined in later IGT reviews. The findings have been released in the following reports:

Follow up review into delayed or changed Australian Taxation Office views on significant issues (‘‘U-turns’’ review), and

Follow up review into the Australian Taxation Office’s implementation of agreed recommendations in five reports released between August 2009 and November 2010.

The Follow up review into delayed or changed ATO views on significant issues (‘‘U-turns’’ review) examined the ATO’s implementation of recommendations made in its original report, Review into delayed or changed ATO views on significant issues (the so-called ‘‘U- turns’’ review) of March 2010. 

The term ‘‘turns’’ is commonly used to refer to situations where the ATO retrospectively applies its changed views on significant interpretative matters or administrative practices. 

The IGT found that the ATO fully implemented three of the four administrative recommendations, while fourth has been partially implemented. Two additional recommendations were made ensure that the ATO properly implements holistic approach to managing ‘‘U-turns’’.

The ATO has agreed to implement these additional recommendations.

The Follow up review into the ATO’s implementation of agreed recommendations in five reports released between August 2009 and November 2010 looked at the ATO’s implementation of agreed recommendations made in five separate reports released between August 2009 and November 2010.

The IGT found that all recommendations had been actioned, were being actioned or will be addressed in later IGT reviews.

This news story is reprinted from CCH Tax Week 

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    Australia's biggest companies can keep their tax bills secret for another year after the federal government rejected calls to bring forward laws designed to increase transparency.

    Finance Minister Mathias Cormann dismissed a push by Labor Assistant Treasurer Andrew Leigh to bring forward by one year the publication of data about the tax paid by companies with total income over $100 million.

    If the bill were passed it would require the Australian Taxation Office to immediately publish on its website information about Australian companies' taxable income, and total income and tax paid for the 2012-13 financial year. The Tax Office can publish the information for both public companies and private businesses.

    Mr Leigh said making Australian companies publish exactly how much tax they pay in Australia each year could pressure them to stop profit shifting. The current tax transparency laws, which Labor rushed through Parliament weeks before it lost government, require Tax Commissioner Chris Jordan to start publishing from next year information for the 2013-14 year.

    Mr Leigh said Labor moved to bring the laws forward by one year so Australians could immediately see the books of Australia's largest companies and know exactly how much tax multinationals paid. "Greater information disclosure will allow for a more informed public debate, creating an environment for better policy development," he said.

    "At the same time, improved transparency promotes trust and credibility in our taxation system while discouraging large multinationals from engaging in aggressive tax avoidance practices."

    But Senator Cormann did not agree to bring them forward, instead saying: "Labor in government mismanaged the economy and the budget. Now they're admitting they mismanaged their own tax agenda as well."

    Senator Cormann did not respond to Fairfax Media's questions about whether the Coalition would dump the existing laws to begin publishing 2013-14 tax information of Australia's top companies by next year.

    Coalition members including Treasurer Joe Hockey, who has been trumpeting the G20 agenda to clamp down on tax avoidance by multinationals, voted against the laws in opposition.

    Former assistant treasurer Arthur Sinodinos said in an interview before he stepped down that the Coalition voted that making such information public would mislead the public and "detracts from being well informed about whatever it is we're seeking to uncover".

    In Australia at present only two mining companies, Rio Tinto and BHP Billiton, voluntarily publish reports about how much tax they pay in Australia and around the world. Most companies do not make it easy for the public to find detailed information about their tax affairs.

    The laws would not have an impact on US technology companies such as Apple and Google, which have copped the bulk of criticism against multinationals who profit shift, as they are headquartered outside Australia. But some European countries also require certain companies to make their tax information public.

    The Tax Office supports local companies being more transparent. Second commissioner Andrew Mills said in a recent interview ¬that companies needed to be open about their tax affairs to avoid damaging their reputation. "Sunlight is a great disinfectant," Mr Mills said in his first interview since taking the Tax Office role in December.

    But the main man leading the tax avoidance hunt on behalf of the OECD prefers that such information stays in the hands of government rather than being made public. Head of tax for the OECD, Pascal Saint Amans, told Fairfax Media in an interview ahead of the G20 summit in Brisbane it would be better for tax authorities to collect the information confidentially than risk not getting it at all.

    This news story is reprinted from www.smh.com.au

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    THIS MORNING

    In Australia, no major economic data is scheduled. In the US, the Markit "flash" services index is released with the National Activity index and Kansas City and Dallas Federal Reserve manufacturing indexes.

    OVERNIGHT MARKETS

    US Equities

    US sharemarkets posted solid gains on Friday with the Dow Jones and S&P 500 indexes at record highs. But restraining the gains were declines by key technology stocks with Microsoft down 1.5 per cent and Netflix down 2.1 per cent. The Dow Jones rose by 91 points or 0.5 per cent with the S&P 500 index up by 0.5 per cent and the Nasdaq lifted 11 points or 0.2 per cent. Over the week the Dow Jones rose by 1.0 per cent, the S&P 500 index was up by 1.2 per cent while the Nasdaq rose by 0.5 per cent.

    US treasuries rose on Friday (yields lower) after the European Central Bank chief highlighted the difficult European economy and flagged that more stimulus may be required. US 2 year yields fell by 1 point to 0.505 per cent while US 10 year yields fell by 3 points to 2.31 per cent. Over the week US 2 year yields fell by less than 1 point while US 10 year yields fell by 2.5 points.

    Major currencies were mixed against the greenback in the European and US sessions on Friday as traders dissected news from Europe and China. The Euro eased from highs near $US1.2555 to lows near $US1.2375, and was around $US1.2390 in late US trade. The Aussie dollar rose from lows near US86.00c to around US87.20c, and was near US86.65c in late US trade. The Japanese yen held between ¥117.38 per US dollar and ¥118.08 and was at ¥117.77 in late US trade.

    World oil prices rose on Friday in response to the Chinese rate cut and speculation that OPEC may reduce production quotas on Thursday. Brent crude rose by $US1.03 or 1.3 per cent to $US80.36 a barrel while the US Nymex crude price rose by US66c or 0.9 per cent to $US76.51 a barrel. Over the week Brent crude rose by US95c or 1.2 per cent while US Nymex rose by US69c or 0.9 per cent.

    Base metal prices rose by between 0.8-2.1 per cent on the London Metal Exchange on Friday with zinc leading the gains while copper lagged. Over the week metal prices rose up to 6.7 per cent with nickel leading the way but copper rose just 0.1 per cent. Gold rose on Friday in response to the Chinese rate cut and short covering. Comex gold futures rose by $US6.80 an ounce or 0.6 per cent to $US1,197.50 per ounce. Over the week gold rose by $US11.90 or 1.0 per cent. Iron ore eased by US20c to $US69.80 a tonne on Friday and fell by $US5.70 or 8.2 per cent over the week.

    YESTERDAY'S MARKET 

    Local Markets Update.

    This news story is reprinted from www.businessspectator.com.au

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