Economics and industry update | 26 May 2023

26 May 2023

Multinational tax transparency

ACCI has been actively engaged in consultation with the government on the exposure draft of the new multinational tax transparency legislation. This implements the country-by-country reporting (CbCR) requirements under Pillar Two of the OECD Inclusive Framework on Base Erosion and Profit Shifting.

In general, we are supportive of the legislation and its objective to provide greater transparency of financial and taxation data to ensure multinational enterprises (MNEs) pay a fair share of tax. However, we have raised concerns about a number of inconsistencies in the approach taken by the Australian government in implementing the CbCR relative to the OECD standard. These include additional data disclosures, a lack of safeguards for commercially sensitive data, as well as the timing of its introduction relative to the OECD timetable.

Working closely with the International Chamber of Commerce, ACCI made a submission to Treasury during the consultation period on the Bill and has subsequently held discussions with the treasurer’s office and the Treasury department.

With MNEs expected to commence CbCR on 1 July, we can expect the revised legislation to be tabled in parliament in the next few weeks.

Temporary Full Expensing extension request

On Wednesday, ACCI CEO Andrew McKellar wrote to the Treasurer to request an extension to the Temporary Full Expensing (TFE) initiative. We are aware of small businesses who made investments in new plant and equipment earlier in the year under the TFE who are still waiting for delivery, as a result of uncontrollable supply change delays.

ACCI has requested the TFE be amended so those businesses who entered into a purchase agreement before the March 30 are given additional time until September 30 to install their product and claim accelerated depreciation.

This is particularly important as from July 2021, a new instant asset write-off threshold will apply of $20,000 for eligible businesses that have an annual turnover of less than $10 million.

Electricity Default Market Offer

The Australian Energy Regulator this week released its determination on the default market offer (DMO) for the 2023-24 financial year.

The DMO is the safety net price ceiling for consumers and small businesses who have not negotiated new electricity supply contracts with their provider.

Under the DMO, small business customers face increases of 14.7 per cent to 28.9 per cent, depending on their region. For the average small business with consumption of 10,000 kWh, this represents a price increase of between $639 (in NSW) and $1,310 (in SA).

While there is some variation across the regions, prices are slightly higher than the initial projection in the preliminary DMO in March.

Full detail on the DMO can be found here.

Economics and industry update | 26 May 2023

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Economics and industry update | 26 May 2023

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