The Australian Taxation Office (ATO) introduced changes to Country-by-Country reporting (CbCR) from 1 January 2025, which requires Version 4 of the local file/master file schema for reporting periods starting on or after 1 January 2024.
Country-by-Country reporting changes from 1 January 2025
About the reporting changes
From 1 January 2025:
- Country by Country Reporting Entities (CbCREs) will use an updated version of the Local File/Master File (LCMSF) service for lodgments for reporting periods starting on or after 1 January 2024
- LCMSF Schema Version 4.0 (V 4.0) will incorporate the short form (SF) section of the local file into the Message Structure Table (MST).
The current design of the SF requires CbCREs to disclose information about their Australian entities and operations in an LCMSF attachment. This approach isn’t delivering a sufficient level of information for SF reporting.
SF reporting is used to detect higher risk international tax structuring and profit shifting arrangements.
The current design of the SF as an LCMSF attachment results in:
- inconsistent reporting content
- inconsistent reporting format or structure
- incomplete information in some reports not satisfying the level of reporting required in the SF instructions.
When reporting changes apply
V 4.0 will apply to statements lodged from 1 January 2025 relating to reporting periods starting on or after 1 January 2024.
Statements relating to reporting periods starting before 1 January 2024 may continue to lodge using LCMSF Schema Version 3.0 (V 3.0), though we will encourage the use of V 4.0 for all reporting periods.
V 3.0 is expected to be deactivated for all reporting periods on 1 January 2026.
Earlier, ATO published updated guidance on the local and master file requirements, which applies to reporting periods beginning on or after 1 January 2024.
