Transparency on corporate profits

What is the problem that this change would seek to address? 

In Aotearoa New Zealand the public, and sometimes governments, have limited or not information on the taxable income and how much tax corporations should be paying. Without this information it is difficult to make good policy and enforcement decisions to ensure big corporates are paying the tax they owe.

How could we increase transparency on corporate profits?

We could take a leaf out of Australia’s book and require all New Zealand companies to file publicly available financial statements if their assets and revenue exceed a certain threshold, or if they had a significant contracts or revenue from government. IRD should be required to publicly report on the taxable income and tax payable by companies with revenue over a certain threshold, e.g. $100 million.

In terms of multi-national corporations, again we could follow Australia’s lead and adopt public country-by-country reporting, which requires multi-nationals to provide information to tax authorities in their countries of residence, which then report to tax administrations in other countries. 

Why would this be better?

These changes would both improve our ability to enforce existing tax obligations and gather much needed revenue, and also identify where we need to make changes in our corporate tax laws to close loopholes. 

They would also bring us into line with other countries, like Australia and EU Member States.