On 6 August 2015, the Australian Treasury released exposure draft law to implement reporting requirements for large multinational businesses in line with recommendations by the OECD and G20.
In the 2015-16 Budget, the Australian government announced it will implement the Organisation for Economic Cooperation and Development’s (OECD’s) new transfer pricing documentation standards (commonly referred to as Country-by-Country (CbC) reporting).
Under the new documentation standards, the ATO will receive the following information on large companies that operate in Australia:
- a Country‑by‑Country Report showing information on the global activities of the multinational, including the location of its income and taxes paid;
- a master file containing an overview of the multinational’s global business, its organizational structure and its transfer pricing policies; and
- a local file that provides detailed information about the local taxpayer’s intercompany transactions.
The standard was recommended under Action Item 13 of the G20/OECD Base Erosion and Profit Shifting Action Plan. These new reporting requirements apply to companies with global revenue of $1 billion or more. They will be required to lodge the documents with the ATO within 12 months of their income tax year-end. The reporting requirements will come into effect for the first income tax year beginning on or after 1 January 2016.
