This study examines the association between environmental, social, and governance (ESG) performance and corporate tax aggressiveness among publicly listed Australian firms using a comprehensive data set from 2009 to 2024. Drawing on stakeholder and legitimacy theories, we find that higher ESG performance, particularly in the social dimension, is significantly linked to lower tax aggressiveness. Using Refinitiv ESG scores and a peer-adjusted tax aggressiveness measure (TA_GAAP), the analysis remains robust to alternative measures and extensive controls. Policy relevance is notable. For the Australian Taxation Office, social ESG indicators could enhance Justified Trust risk assessments. The findings also support integrating tax transparency metrics into ESG reporting frameworks for Treasury and standard setters. Boards and executives can align social responsibility initiatives with prudent tax strategies to strengthen compliance, investor confidence, and stakeholder trust. The study reinforces the view that responsible tax conduct is essential to sustainable corporate practice in the Australian context.
This article considers some of the main differences between the Australian and Indonesian approaches to tax administration, with emphasis on differences in the design of the two systems. Australia's tax system is high performing. Revenue targets are regularly met, and an annual Tax to Gross Domestic Product (GDP) ratio in the range of 23%-24% is consistently achieved. In contrast, Indonesia's tax system does not yet generate sufficient revenue to meet the Indonesian Government's long-term aspiration to achieve a 16% Tax to GDP ratio. Through a better understanding of some of the design differences between the two systems in their approach to tax administration, Indonesia's Directorate General of Taxation could identify changes which, if adopted, may assist it to achieve its long-term revenue goals.
Death changes the status of a pre-capital gains tax asset to a post-CGT asset for the deceased's donee. This suggests no asset can remain a pre-CGT with time. Division 149 deals with pre-CGT assets held in entities. The general rule is where a substantial change in ownership of the entity occurs (50% or more) compared to the ownership position at CGT start date, the entity's pre-CGT assets will become post-CGT assets. However, where the disqualifying change in ownership of the entity occurs by reason of death, such a change of status is deemed to not occur. This exception to the general rule clearly applies where the deceased was a CGT start date owner. However, there is some doubt as to whether the exception can apply where the taxpayer who obtained the interest from the CGT start date owner passes it on to their beneficiary on death, that is, a subsequent testamentary transfer(s). If the exception does apply to subsequent testamentary transfers, the possibility of a pre-CGT asset in say 150-years is raised.
At any one time more than two million Australians will have a tax debt owing to the Commonwealth. The Commissioner of Taxation has considerable powers to collect these debts, but also has powers to assist taxpayers who are experiencing financial vulnerability. These latter powers are not well understood and, in some cases, their scope, and even existence, are not yet settled. This article explores these powers, some of which are express legislative powers, while others are at best incidental to an express power. Other suggested powers will be seen as most likely conferring no power all. This article calls for a redefining of the Commissioner's powers to assist taxpayers experiencing financial vulnerability with their taxation debts, and makes recommendations for reform.
Despite the rising interest in the tokenisation of rights to land, the tax systems of many jurisdictions have not addressed this issue to a large extent. This article considers the Australian tax treatment of land tokens and, in particular, "real estate tokens", which generate an income stream, and "mining tokens", which provide a promise of the future supply of resources. The article first establishes that land tokens referable to Australian land, issued by private enterprises, do not provide proprietary rights to Australian land. After examining the commercial features of land tokens, the article shows that potential income tax challenges would likely arise as a result of the scope of Australia's capital gains tax regime, which currently applies to non-residents in relation to dealings with taxable Australian property. The history and development of the non-resident capital gains tax regime in Australia shows, in the absence of common law source rules, three main policy rationales underlying the current legislative design: alignment with international tax practice, administrative simplicity and consideration for foreign investment. However, this article finds that none of these tax policy rationales provide convincing grounds for capital gains derived by non-residents with respect to their Australian land token dealings being excluded from taxation. The Australian Government may operate on the basis that land tokens are dealt with on a portfolio basis (less than 10% of the value of the total token asset per investor), which makes the legislative inclusion of land tokens within the capital gains tax regime unnecessary. However, the question of whether to tax capital gains derived by non-residents upon disposal of Australian land tokens ultimately remains a matter of policy for the government to decide as the existing policy bases neither support nor exclude such taxation.
This article explores the tension between res judicata and taxpayers' rights to claim refunds for overpaid taxes due to administrative errors, focusing on the tax systems of Australia and Taiwan. In Australia, res judicata does not prevent taxpayers from challenging tax assessments orseeking refunds if new facts or errors are discovered, as the Income Tax Assessment Act 1936 (Cth) grants the Commissioner of Taxation the authority to amend assessments at any time. In contrast, Taiwan's amended Tax Collection Act restricts refund claims after a final judgment, even in cases of administrative error. This article compares these legal frameworks, arguing that Taiwan's current system may undermine fairness by limiting the correction of administrative mistakes. This article recommends that Taiwan should reform its tax laws to allow refunds in such cases and more clearly define the scope of res judicata to better balance procedural finality with taxpayer fairness.
Following high-profile scandal in early 2023 involving a registered tax agent, the Treasury's reform package in August 2023, included the priority area of strengthening the regulatory arrangements to ensure they were fit for purpose. This resulted in the Treasury Laws Amendment (Tax Accountability and Fairness) Bill 2023 (Cth) receiving Royal Assent in May 2024. This included Sch 3 covering Tax Practitioner Board (TPB) Reforms from expanding details of tax practitioners that are currently included in the TPB Register and addressing the issue of unregistered tax practitioners. This study builds on previous work which examined TPB Investigations statistics and decisions, by undertaking an analysis of select data in the TPB Annual Reports for the period 2018-2023 pertaining to both registered and unregistered tax practitioners. In addition, a detailed investigation of the TPB Register (2023) itself is completed, examining those who have received sanctions and/or terminations. The findings revealed, that while improvements had been made to the register's functionality, further refinements were required regarding its search capabilities and information contained therein. From the point of view of deterring and detecting unregistered preparers, ongoing compliance and educational measures are encouraged. At the same time, we strongly recommend that a dedicated register of unregistered tax practitioners be published. The findings of the study add to the policy debate and will assist in ascertaining key benefits and challenges that the TPB faces with respect to unregistered tax practitioners and the TPB Register.
Tax avoidance using complex financial products has been an issue of preoccupation for academics, regulators, and tax administrators alike. Upon the unsuccessful application of specific anti-avoidance rules, the curtailing of revenue-corrosive, avoidant practices relies on the successful application of general anti-avoidance rules. These rules serve as a measure of last resort. However, due to the lack of certainty in the application of these provisions, this said application leaves administrators, and taxpayers in a precarious position. This article considers the application of general anti-avoidance rules to offshore-securitisation transactions designed to supplant dividend distribution in two jurisdictions, Australia, and South Africa. An argument is made for the development of specific anti-avoidance provisions targeted at abusive offshore securitisation. The article applies a hypothetical case study designed from an analysis of a collection of securitisation agreements.
This article focuses on the importance of good tax administration and what it takes to deliver good public administration within the context of the Australian tax system. As the Inspector-General of Taxation and Taxation Ombudsman (IGTO), I see many examples of where tax administration goes wrong. I am keen to start 2025 with a renewed focus on how we get tax administration right, and continuously improving. With cost of living pressures continuing to be front of mind for all taxpayers-be they individuals or businesses-and debt collection being front of mind for the Australian Tax Office, then I propose that we need heightened attention on getting the administration right, on behalf of the community. Good administration will result in more taxpayers perceiving the system to be fair and reasonable, which will build community confidence, drive higher compliance and minimise the cost to both taxpayers and government.
In aggregate, individuals income tax "cuts" over the past half century in Australia have broadly returned bracket creep, keeping individuals income tax at around half of total Commonwealth tax revenue. This article assesses the question of what, if any, impact that has had on the progressivity of individuals income tax. The article provides a survey of the main methods that have been used to measure the progressivity of a tax and the results that have been previously estimated for Australia. It also presents new estimates for changes in the progressivity of Australia's individuals income tax since 1942 using a methodology based just on the legislated tax rate scale. Overall, these estimates suggest that individuals income tax progressivity decreased in the post-war period but has been relatively stable over the past 40 years-although with some notable shorter-term fluctuations.
Following the Independent Review of the Tax Practitioners Board (TPB) in 2019 and high-profile scandal in early 2023, Treasury announced a significant reform agenda. As part of this package, legislation introduced was designed to increase the powers of the regulators and strengthen regulatory arrangements. Following initial work on the TPB Review by Devos, Morton, Curran and Wallis focusing on TPB recommendations relating to the Code of professional conduct, investigations and sanctions, this study builds on those findings with a narrow focus on TPB investigation and sanction activities. This study examines the longitudinal data in the TPB Annual Reports for the period 2018-2023 to understand the investigative activities of the TPB, and their outcomes. This study canvases information from the sources of complaints referrals, Board Conduct Committee matters examined and decisions and the Tax Agent Services Act 2009 (Cth) breach allegations. The findings offer independent insights to inform both the TPB and Government at a critical juncture created by recent scandal.
With the introduction of pre-filled income-related data and e-filing to the Australian taxation system, the Australian Taxation Office (ATO) had expected that the compliance cost burden would be eased, and that taxpayers' compliance behaviour would improve. We investigate whether such technological advancement coincides with a reduction in taxpayers' costs of managing their tax affairs pursuant to s 25-5 of the Income Tax Assessment Act 1997 (Cth) (or item "D10"). Using ATO published data, this study investigates the variation in D10 between taxpayers lodging their tax returns via (1) e-filing and (2) using the services of tax agents. The study reveals several novel findings: (1) we find that in contrast to tax agent- lodged returns, the percentage of taxpayers claiming D10 over e-filing has decreased, which coincides with the implementation of pre-filled data; (2) the average amount claimed at D10 by e-fillers is increasing at a faster rate relative to taxpayers lodging via tax agents, (3) low-income earners lodging via e-filing have claimed a higher average D10 amount relative to high- income earners; (4) there is an increasing number of e-fillers claiming more than $3,000 at D10 and paying zero taxes; and, (5) If the government impose a cap of $3,000 in D10 deduction, we estimate it could generate a yearly increase of $188 million in government revenues. We, therefore, reflect on the issues of complexity and compliance inherent and exemplified by the costs of managing tax affairs.
Since Bitcoin was created in 2009, the Australian tax law has slowly responded to the increasing trading in, and widespread use of, cryptoassets. In 2017, the goods and services tax (GST) legislation was amended to introduce a new concept of "digital currency", effectively exempting cryptoassets used as a means of exchange or for the provision of financial services from taxable supplies. However, the international landscape continued to evolve: El Salvador declared Bitcoin a legal tender in 2021, and the Chinese central bank issued a new digital currency in 2020. Responding to these global shifts, the Australian federal government, in 2022, proposed refining the GST definition of "digital currency" to exclude "government-issued digital currencies". Moreover, it mooted the idea of extending this amended definition to the income tax law. This article examines the proposal to insert a new definition of "digital currency" within Australian income tax law for the first time. It begins with an exploration of the foundational principles underpinning GST and income tax. Then, navigating legal and policy implications, it casts a spotlight on digital currency within the income tax paradigm. A pertinent case in point is Seribu Pty Ltd v Federal Commissioner of Taxation, in which the Administrative Appeals Tribunal held that Bitcoin was not a foreign currency subject to the taxation of foreign currency gains and losses under Div 775 (the forex regime). This article then examines the GST characterisation of digital currency, juxtaposing it against the meaning of money and characteristics of central bank-issued currencies. It concludes that the adoption of the GST definition of digital currency for the income tax law is logical and that the implementation of the proposal will strengthen the legal frameworks for taxing digital currencies in Australia.
Since the late 1990s, the Australian Taxation Office (ATO) has been regulating the Australian tax system using the compliance model that advocates for regulation in response to a taxpayer's compliance behaviour, stance or attitude and escalates the severity of its response as the taxpayer becomes more disengaged. This model assumes that taxpayers have the capacity to comply, but many may slip through the cracks in the tax system and have difficulty complying for reasons beyond their control. As a result, the ATO's application of the compliance model may lead to these taxpayers being unjustly regarded as seriously noncompliant resulting in them being unjustly met with the full force of the law. This article illustrates situations where taxpayers have slipped through the cracks using autoethnographic methods to compare the ATO's treatment of them against the principles of the compliance model to recommend changes in ATO practice.
Goodwill as a concept is relevant across several areas of the law. Goodwill is inherently linked to a business and its value derives from the business. However, in recent times, the courts have recognised the concept of a "going concern value" of a business, which is distinguished from the goodwill of the business and represents the value of the business operating as a going concern. This article analyses these concepts by considering the nature of a business and way in which businesses are transferred. It also considers the "excess value" of a business, being the value over and above the values of identifiable assets, and notes that this is difficult to determine, partly because it is difficult to determine the methodologies for valuing the identifiable assets. The treatment of the excess value, as either goodwill or the "going concern value" of a business can be reconciled by identifying what is made up in the "excess value" of a business. In order to do this, this article identifies how one would go about determining what portion of the excess value relates to goodwill and what relates to the going concern value of the business; some may be allocated to the separate concept of the synergistic value of a business. In this regard, the portion that is allocated to the going concern value of the business is actually allocated to the non -goodwill assets of the business.
Rick Krever has had a distinguished career as a brilliant tax scholar, passionate tax reformer, inspired educator, and trusted mentor to countless graduate students and tax officers. As his law school professor, sometimes collaborator, partner on a few overseas tax missions, and consumer of his prolific output, I have had a ringside seat in observing the development of his multi -faceted career. This article recounts a few of my personal recollections.
Since the 1960s many jurisdictions have sought to create financial service centres to attract mobile capital by using tax incentives. In June 1996 the G7 raised concerns about the distortionary effects of such tax preferences. In 1998 the OECD responded by creating the Harmful Tax Practices project aimed at identifying jurisdictions as tax havens and classifying tax preferences in other jurisdictions as harmful, with the aim of exerting pressure on those jurisdictions to amend or abolish the offending schemes. This article examines the OECD's process for assessing whether a tax preference is harmful or not. It notes that, the OECD's approach does not deal with harmful tax competition arising from the cumulative impact of a suite of tax preferences, harmful or not, aimed at attracting mobile capital. The need counter this form of harmful competition, in respect of jurisdictions where the establishment of a financial centre is based on multiple tax incentives, is briefly explored.
A neglected aspect of Australia's climate change policy is the role of income tax measures in protecting the environment and reducing greenhouse gas emissions. Tax expenditures are used by governments to intervene in markets and influence the behaviour of particular taxpayers/industries. But they are difficult to identify and less transparent than program spending as they have no annual appropriation requirement. Target groups of tax concessions are less clearly defined, there is little government control over the costs of the expenditure, and they are not regularly reviewed. This article seeks to develop an evaluation framework for tax expenditures. Its principal aim is two -fold. First, it identifies some suitable income tax measures relating to environmental protection in Australia. Second, it conducts a preliminary analysis of these income tax measures and presents an overview of the theoretical considerations involved in their evaluation. Given the limitations of space, the evaluation presented here is synoptic.
The Australian Government introduced amendments under the Treasury Laws Amendment (Electric Car Discount) Bill 2022 (Cth), exempting from fringe benefits tax (FBT) for all zero or low -emission vehicles (that do not exceed the Luxury Car Tax Threshold for fuel -efficient vehicles over the four years (1 July 2022-30 June 2026) at a projected cost of $205 million to the public sector. The Australian Government is relying on this policy reform to encourage a greater uptake of electric vehicles (EVs) and contribute to its emission reduction target. The article will examine the effectiveness of the EV FBT amendments in meeting the government's objectives and whether it is both fair and equitable to all eligible employees and not disproportionately beneficial to higher -income earners. The article finds that behavioural economic considerations are critical when reforming blunt policy instruments to influence behaviour, which means understanding the factors that influence future buyers of EVs.
Australia has committed to reduce greenhouse gas emissions and part of that commitment is the enactment of the Renewable Energy (Electricity) Act 2000 (Cth). This paper focuses on the Australian Renewable Energy Target and how the REE Act impacts on the electrical generation industry to dilute greenhouse gas emissions. The paper considers the market of trading ‘carbon credits’ created under the provisions of the REE Act, and referred as renewable energy credits (RECs), to be a system of taxation and subsidisation. It aims to develop a clear understanding of the operations of the REE Act; how it interacts with Australia’s two other main taxes – Income Tax and Goods and Services Tax, and suggests how the trade of RECs may be treated in the accounts of the respective trading entities – the liable parties and renewable energy based electricity generators.
