On 12 February 2024, the Australian Treasury announced it is conducting an additional public consultation regarding implementing new requirements for publishing selected tax information on a Country-by-Country (CbC) basis or public CbC reporting. This consultation includes releasing revised exposure draft legislation (ED) and explanatory materials (EM), which will introduce public CbC reporting in Australia for tax periods starting on or after 1 July 2024.
Under the proposed regulations, certain entities would be obligated to disclose specific tax information to the ATO Commissioner, which would be published on the official website of the Australian government.
Specified entities include entities that are a CbC reporting parent within the meaning provided by section 815-375 of the ITAA 1997 (a) and:
- If the CBC reporting parent is a company, it is a constitutional corporation or
- If the CBC reporting parent is a trust, each of the trustees is a constitutional corporation or
- If the CBC reporting parent is a partnership, each of the partners is a constitutional corporation, and
- At any point during the reporting period, they, or a member of their CBC reporting group, is an Australian resident or foreign resident with an Australian permanent establishment.
Pursuant to a materiality carve-out, CbC reporting parents are not required to publish the selected tax information if their aggregated turnover includes less than a total of AUD 10 million of Australian-sourced income. Likewise, the Commissioner is empowered to exempt a reporting entity or a class of reporting entities from reporting or from disclosing a particular type of otherwise required information.
Reporting entities may elect to report the information on either an aggregated or a jurisdictional basis. However, information pertaining to Australia as well as to 41 listed jurisdictions, is required to be reported on a jurisdictional basis.
The CbC reporting parent is required to publish the following general information:
- Its own name;
- The names of each entity in the CBC reporting group and
- A description of the CbC reporting group’s approach to tax.
Furthermore, reports made on a jurisdictional basis (i.e. with respect to Australia and the 41 listed jurisdictions, as well as, if so elected, other jurisdictions in which the CbC reporting group operates) must contain the following information at a group level:
- The name of the jurisdiction;
- A description of the main business activities;
- The number of employees (on a full-time equivalent basis) at the end of the reporting period;
- Revenue from unrelated parties;
- Revenue from related parties that are not tax residents of the jurisdiction;
- Profit or loss before income tax;
- Book value at the end of the reporting period of tangible assets other than cash and cash equivalents;
- Income tax paid (on a cash basis);
- Income tax accrued (current year);
- 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.
- Information reported on an aggregate basis must contain the following:
- A description of the main business activities;
- The number of employees (on a full-time equivalent basis) at the end of the reporting period;
- Revenue from unrelated parties;
- Revenue from related parties that are not tax residents of the jurisdiction;
- Profit or loss before income tax;
- Book value at the end of the reporting period of tangible assets other than cash and cash equivalents;
- Income tax paid (on a cash basis);
- Income tax accrued (current year); and
- The currency used in calculating and presenting the above information.
An entity will be penalized 500 penalty units for each period of 28 days or part of a period of 28 days starting on the day when the information is required to be published and ending when the entity provides the information to the Commissioner (up to a maximum of 2,500 penalty units).
The deadline for submitting comments is 5 March 2024.