Australia releases draft legislation on public CbC reporting requirement

12 April, 2023

On 6 April 2023, the Australian Treasury Department issued draft legislation outlining the implementation of public country-by-country (CbC) reporting requirements for specific tax-related information to be disclosed by multinational enterprises (MNEs).

As part of the October 2022‑23 Budget, the government announced a transparency measure for multinational entities to prepare for public release certain tax information on a country‑by‑country basis and a statement on their approach to taxation. The measure will enhance the tax information entities disclose to the public (for income years commencing from 1 July 2023).

According to the draft legislation, the new measures will apply to CbC reporting parent entities (applying the current definition – i.e., certain entities that are not controlled by another CbC reporting group entity, with annual global income of $1billion or more) who are members of a CbC reporting group.

Information that must be published

The CBC reporting parent is required to publish selected tax information that relates to itself and its CBC reporting group. Broadly, the information required to be published relates to presence and tax dealings across jurisdictions and should provide a picture of how the entity structures its tax affairs in Australia and globally.

The CBC reporting parent is required to publish the names of each entity in the CBC reporting group and a description of the group’s approach to tax. In addition, for each jurisdiction the CBC reporting group operates in, the CBC reporting parent must publish, at a group level:

a description of main business activities;
number of employees;
revenue from unrelated parties;
revenue from related parties;
expenses from related party transactions;
profit and loss before income tax;
a list (including the value of) tangible and intangible assets;
income tax paid (on cash basis);
income tax accrued (current year);
effective tax rate;
the reasons for the difference between income tax accrued (current year) and the amount of income tax due if the income tax rate applicable to the jurisdiction were applied to profit and loss before income tax; and
the currency used in calculating and presenting the above information.