In a significant step toward curbing multinational tax avoidance, the Australian Senate has passed pioneering legislation on corporate tax transparency during its final session before the elections. The new law, championed by Tax Justice Network-Australia, CICTAR (Centre for International Corporate Tax Accountability & Research), and a coalition of civil society organisations, unions, and investors, is expected to generate billions in additional revenue by targeting profit-shifting practices of multinational corporations.
The legislation mandates major multinationals operating in Australia to publish country-by-country reporting data, detailing their activities, profits declared, and taxes paid in jurisdictions identified as high risk. Evidence from jurisdictions with similar requirements shows that such transparency increases effective tax rates paid by corporations. Globally, the Tax Justice Network estimates that public country-by-country reporting could yield an additional $89 billion annually in tax revenue.
This measure has broader global implications, offering greater corporate transparency and momentum for international efforts, including the UN’s upcoming 2025 negotiations on a framework for international tax cooperation.
Australia’s legislation surpasses the European Union’s equivalent measure in two key areas. First, it allows the finance minister to identify jurisdictions that pose a significant tax risk, with the preliminary list including notable tax havens like Singapore and Hong Kong, ranked highly on the Corporate Tax Haven Index. In contrast, the EU limits reporting to its member states and a narrow list of “non-cooperative” jurisdictions.
Second, the Australian framework aligns with the Global Reporting Initiative (GRI) standard, a globally recognised benchmark co-developed by investors, labour groups, and civil society experts. This contrasts with the EU’s reliance on the less rigorous OECD standard, which has faced criticism from investors managing trillions in assets.
The legislation faced significant opposition, including lobbying from the OECD to stall its progress. However, a determined push from the Australian government, bolstered by support from global civil society leaders and a last-minute agreement with the Green Party, ensured its passage during the Senate’s final sitting.
Alex Cobham, chief executive at the Tax Justice Network said, “We celebrate this important legislation and the years of campaigning work that has made it possible. The corporate tax transparency delivered today will contribute to curbing multinationals’ tax abuse, not only in Australia but around the world – with billions of dollars at stake. Bit by bit, we are achieving the goal of public country-by-country reporting, to put multinationals on a level playing field with smaller, domestic businesses. Australia’s legislation is world-leading, and sets a new bar for others to follow.”
He added, “Global momentum is with tax justice. This great victory comes hot on the heels of yesterday’s UN General Assembly vote to start negotiations on an international tax convention. That convention will be a vehicle for comprehensive reforms, and one of the first priorities should be to establish a global requirement for public country-by-country reporting by multinationals.”
Jason Ward, CICTAR said, “Australia’s public country-by-country reporting legislation leaps in front of much weaker efforts in the EU. Other jurisdictions will follow Australia’s move to require far greater transparency from the world’s largest multinationals. Corporate giants, with ever-growing profits, have stolen funding from public health, education and a sustainable future for far too long.”
Dr Mark Zirnsak, spokesperson for the Tax Justice Network Australia said, “The new law will help deter the tax dodging games that multinational corporations and their tax advisers have been able to play for too long, to the detriment of ordinary people who pay their taxes as required to fund the government services we all need and rely on.”
