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Australia to introduce Public Country-by-Country Reporting from 2024 onwards

Luca Wright, Anthony Patrk, Jason Matchado
28/02/2024

In April 2023, Treasury first introduced the idea of Australian Public Country-by-Country (CbC) Reporting – a transparency measure for multi-national entities whereby certain tax information on a country-by country basis and a statement on their approach to taxation would be publicly disclosed. 

Following feedback received during the initial consultation period, Treasury has on 12 February 2024, released an updated Exposure Draft for Australian Public CbC Reporting. In this article, we summarise the critical information multinational enterprises should be aware of regarding Public CbC Reporting in Australia. 

Who does this apply to?

Public CbC Reporting will apply to any entity which meets the following criteria:

  • Meets the definition of a CbC Reporting Entity in Australia as per Subdivision 815-E of the Income Tax Assessment Act 1997 (i.e., the entity has existing Australian CbC Reporting requirements).
  • The entity’s aggregated Australian sourced turnover for the income year is A$10 million or more.

The Exposure Draft includes a provision allowing the Commissioner to grant an exemption from Public CbC Reporting to specific entities, or a class of entities. It is not yet clear what criteria will be required to be met for an exemption to apply, however, it is expected that the granting of such exemptions will be limited.

What you need to know

Effective Date

Public CbC Reporting legislation is to be effective from reporting periods beginning on or after 1 July 2024. This is a 12-month deferral from the effective date disclosed in the initial exposure draft released in April 2023.

Lodgement due date and process

Public CbC Reporting entities will be required to lodge the required information with the Commissioner within 12 months after the reporting period in an approved form. It is expected that the lodgement process will be similar to the existing Australian CbC reporting statements.

Where it will be published

Once the Commissioner receives the Public CbC Report, the information will be made available to the public on an Australian government website. The specific website details are yet to be determined.

Penalties

Failing to comply with Public CbC Reporting requirements on time will result in an administrative penalty of 500 penalty units, every period or part of a period of 28 days, up to a maximum of 2,500 penalty units. This currently equates to A$156,500 every 28-day period, up to a maximum of A$782,500 but is expected to increase further by the time the legislation is in effect.

How to prepare for Public CbC Reporting

The following summarises the disclosure requirements for Australian Public CbC Reporting. 

 General information 

  • The name of the entity 
  • The names of each other entity that, at that time, was a member of the CbC reporting group 
  • A description of the CbC reporting group’s approach to tax
Australian and specific jurisdictions   Other jurisdictions 
 Information must be provided on a per jurisdiction basis:    Information can be provided either on an aggregated basis for all other jurisdictions or on a per jurisdiction basis: 
  • The name of the jurisdiction 
  • A description of main business activities 
  • The number of employees (FTE) 
  • Revenue from unrelated parties 
  • Revenue from related parties that are not tax residents of the jurisdiction  
  • Profit or loss before income tax 
  • The 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 currency used in calculating and presenting the information 
  • The reason for the difference between income tax accrued and the amount of income tax due if the income tax rate applicable to the jurisdiction were applied to the profit and loss before income tax disclosed. 
  • A description of the CbC reporting group’s main business activities consisting of the other jurisdictions 
  • The number of employees (FTE) 
  • Revenue from unrelated parties 
  • Revenue from related parties that are not tax residents of the jurisdiction  
  • Profit or loss before income tax 
  • The 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 currency used in calculating and presenting the information 

While the updated Exposure Draft has been revised to more closely align with the European Union’s public CbC reporting regime, additional disclosures are still required in comparison with the existing OECD based CbC Report.  

It is therefore critical that the ultimate parent entity of the global group is aware of the proposed Australian Public CbC Reporting requirements, to ensure that the group is well prepared to comply once the legislation is enacted, mitigating the risk of administrative penalties being levied for failure to lodge. 

Our expert team at Crowe is able to assist you as needed in preparing for Australian Public CbC Reporting. Complete our online form today and a member of the team will contact you shortly.  

Authors: 

  • Luca Wright, Partner, Tax Advisory (Transfer Pricing) 
  • Anthony Patrk; Partner, Tax Advisory 
  • Jason Matchado; Partner, Tax Advisory 

Disclaimer

The views and opinions expressed in this article are those of the author and do not necessarily reflect the thought or position of Findex (Aust) Pty Ltd trading as Crowe Australasia. 

While all reasonable care is taken in the preparation of the material in this article to the extent allowed by legislation Findex Group Ltd accept no liability whatsoever for reliance on it. All opinions, conclusions, forecasts or recommendations are reasonably held at the time of compilation but are subject to change without notice. Findex Group Ltd assumes no obligation to update this content after it has been issued. The information contained is of a general nature only and does not take into account your objectives, financial situation or needs.  

This document contains general information and is not intended to constitute legal or taxation advice. If you need legal or taxation advice, we recommend you speak to a qualified adviser.