In an effort to promote transparency and fairness in government procurement processes, a new measure has been introduced that requires tenderers for large government contracts to disclose their country of tax residency. Effective from 1st July 2023, this measure, which aligns with the Buy Australia Plan, aims to create a level playing field and ensure open competition.This will provide an overview of the residency disclosure requirement and its key implications for businesses tendering for Commonwealth Government contracts valued at over $200,000.
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Applicability to All Businesses: The residency disclosure requirement is applicable to all businesses, irrespective of their national origin, that are interested in tendering for Commonwealth Government procurement contracts. This means that regardless of where a company is based, it must comply with the disclosure regulation when submitting a bid for such contracts.
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Disclosing Multiple Residencies: Entities with multiple tax residencies are required to disclose each country in which they hold tax residency. The disclosure should include the country of tax residency for the entity itself, as well as the country of tax residency for its ultimate parent entity. It's important to note that tie-breaker rules are not relevant for the purpose of this disclosure, and each residency must be accurately reported.
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Non-Corporate Commonwealth Entities: For non-corporate Commonwealth entities, the residency disclosure requirement must be included in all approach to market documentation for procurements valued at over $200,000, including the Goods and Services Tax (GST). This ensures that transparency is maintained throughout the procurement process.
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Corporate Commonwealth Entities: Corporate Commonwealth entities are strongly encouraged to incorporate the residency disclosure requirements into their approach to market documentation. Although it is not mandatory, embracing this approach will promote consistency in Commonwealth procurement processes and enhance transparency. To facilitate compliance, the Treasury website provides examples of model content that can be integrated into entity templates.
The introduction of the residency disclosure requirement for tenderers of large government contracts marks a significant step towards fostering transparency and fair competition. By mandating the disclosure of the country of tax residency, the Commonwealth Government aims to ensure that all businesses, regardless of their origin, operate on an equal footing. It is essential for tenderers to familiarize themselves with this new requirement and adhere to it when submitting bids for government contracts.
Remember, transparency and fair competition are crucial elements in our procurement processes, and this measure reinforces our commitment to upholding these standards.
Got questions? Reach out to Tax Ideas Accountants & Advisers at +61 2 83181545 or book an appointment on our live calendar.
Source: Treasury, Country of tax residency disclosures, accessed 12 July 2023.
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