The ATO has published Tax and Corporate Australia, a new publication about the tax affairs of the large market which includes the large corporate groups tax gap.

The large corporate groups tax gap is an estimate of the difference between the tax the ATO collects from these taxpayers and the amount that would have been collected if every taxpayer was fully compliant.

The vast majority of large corporate groups taxpayers do the right thing and willingly comply with Australian tax laws, contributing $41 billion in corporate tax in 2014–15, most of which is paid voluntarily.

The net large market tax gap is estimated at $2.5 billion, or 5.8 per cent. This figure is calculated after all tax is paid voluntarily and we have conducted compliance activities.

It is normal to have a tax gap. To eliminate all gaps completely would cost more than the additional revenue that would be collected.

The size of the large corporate groups gap reflects a tax system that is operating well, demonstrates a high degree of voluntary compliance, and compares favourably with other international jurisdictions – for example, the United Kingdom, which has a gap of approximately 5–6 per cent.

The ATO, in particular through the Tax Avoidance Taskforce, is focused on identifying, managing and sustainably reducing it over time.

With the support of new legislation, including the Multinational Anti-Avoidance Law (MAAL), we have made significant inroads in getting multinational companies to restructure their tax arrangements to pay their fair share of tax on profits earned in Australia.

We continue to have real-time engagement with all large taxpayers, including access to a wide range of data, including tax return and accounting records, and third party data.

We are also increasing the support and guidance available to these companies to ensure they don’t inadvertently enter into arrangements in contravention of Australia’s tax laws.



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