Australia: Redesigned Voluntary Tax Transparency Code (VTTC)
Principles and minimum standards to guide medium and large businesses on public disclosure of tax information
The Board of Taxation (BoT) has finalized its redesign of the Voluntary Tax Transparency Code (VTTC)—a set of principles and minimum standards to guide medium and large businesses on public disclosure of tax information.
The BoT, which developed and administers the VTTC, aimed to update and simplify the VTTC to better align it with the current tax transparency landscape, which includes:
- Australian measures such as public country-by-country (CbC) reporting, the Consolidated Entity Disclosure Statements (CEDS) for Australian public companies, and Australian Taxation Office (ATO)corporate tax transparency reporting
- International developments, such as Global Reporting Initiative (GRI) standard 207 and EU public CbC reporting
The finalized VTTC is largely consistent with the draft version. Key updates in the finalized VTTC as compared to the original code include:
- Updated objectives and design
- Separation of reporting requirements based on whether a business reports under the Australian public CbC reporting regime, and simplification to minimize reporting duplication
- A reconciliation to the ATO corporate tax transparency disclosures (this was a requirement in the draft but is included as an optional element in the final version)
- Aligning the basis of content surrounding tax risk management and governance and stakeholder engagement to GRI 207-2 and GRI 207-3, respectively
- Guidance including an example template format for VTTC reporting, for both “Public CbC reporters” and “Non-public CbC reporters,” and a self-assessment reporting checklist
The redesigned VTTC will begin for the year starting July 1, 2026, with the option for early implementation.
The BoT has requested that all existing VTTC signatories notify the BoT of their intention to complete the redesigned VTTC.
KPMG observation
Tax professionals find that the finalized VTTC strikes a good balance between transparency and the compliance burden.
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.
It also provides flexibility in areas such as timing and specific form of reporting. For example, compared to the draft version, there is additional acknowledgement that an effective tax rate (ETR) can be calculated on different bases, and while the BoT encourages use of the draft guidance of the AASB, entities may use other methods to calculate the ETR.
For more information, contact a KPMG tax professional in Australia:
Philip Beswick | pbeswick@kpmg.com.au
Val Misiura | vmisiura1@kpmg.com.au
Amanda Maguire | amaguire@kpmg.com.au
Katryne Chia | chia1@kpmg.com.au