Board of Taxation publishes finalised Voluntary Tax Transparency Code redesign

In October, the Board of Taxation (BoT) released the final version of its redesigned Voluntary Tax Transparency Code (VTTC), a set of principles and minimum standards to guide corporate tax transparency for medium and large businesses.

Tax professionals welcomed the updated VTTC, which reflected shifts in Australia’s tax transparency landscape since the code’s inception in 2016.

“Tax professionals find that the finalized VTTC strikes a good balance between transparency and the compliance burden,” KPMG commented.

“It provides some optionality (e.g., reporting on non-corporate taxes and government imposts, tax governance, control and risk management and stakeholder engagement) allowing an avenue for businesses to provide additional tax contributions and approach to tax narratives.”

In August 2024, the BoT was tasked with reviewing the VTTC to supplement policy developments in global and domestic tax transparency and to encourage best practice in tax transparency reporting.

Its initial review, conducted in late 2024, concluded that the VTTC should be simplified to minimise duplication with other transparency regimes and align with policy developments.

The redesign sought to minimise duplication with Australia’s public country-by-country (CbC) reporting scheme, a regime to boost transparency and combat multinational tax avoidance which commenced on 1 July 2024.

The finalised VTTC offered separate guidance to CbC reporting and non-CbC reporting entities.

During the BoT’s consultation, accounting bodies CPA Australia and CA ANZ raised concerns about regulatory duplication and suggested that entities included in the public CbC reporting regime should be excluded from ATO corporate tax transparency disclosures.

“CA ANZ is of the view that entities included in the public CBC reporting regime should be excluded from the Australian Taxation Office (ATO) corporate tax transparency disclosures to reduce the red tape burden,” CA ANZ’s submission read.

“Given the quality of the information provided under the public CBC reporting regime, the purpose for publishing the ATO corporate tax transparency data in respect of those entities is redundant and the differences in numbers provided only causes confusion for users.”

Academics Kerrie Sadiq from QUT and Rodney Brown from UNSW argued that reconciliation to the figures published by the ATO would enhance the usability of tax transparency information.

“We acknowledge that this places an additional burden on VTTC providers,” the academics noted.

“However, if the VTTC is to meet its objective of providing access and visibility for the public to view and compare the tax affairs of companies, the requirement of reconciliation is preferable.”

In the final VTTC, the BoT made the reconciliation of ATO corporate tax transparency disclosures optional, a change welcomed by accounting bodies.

“We’re pleased the Board of Taxation has listened to our feedback and made the reconciliation to ATO tax transparency data optional,” Jenny Wong, tax policy lead at CPA Australia, said.

“Making the reconciliation optional directly responds to concerns raised by industry, allowing companies to continue publishing their VTTC reports in line with their own reporting timetables.”

The updated code is set to take effect for the year beginning 1 July 2026.