Australian public country-by-country reporting requirements

Australia’s public country-by-country (CbC) reporting regime aims to enhance tax transparency for multinational enterprise (MNE) groups by providing greater visibility over where profits are earned and taxes are paid. The regime is intended to help the public assess whether large multinational groups are contributing tax in jurisdictions where they undertake substantive economic activities. Continue reading to understand the reporting obligations.

Entities within scope

The public CbC reporting requirements apply to CbC reporting parent entities that are constitutional corporations. To be captured by the regime, the reporting parent must satisfy a number of conditions, including:

• Being the ultimate parent or controlling entity of a multinational group.
• Reporting annual global revenue of at least A$1 billion in the consolidated financial statements for the previous financial year.
• Having at least one Australian resident entity or a foreign entity operating through an Australian permanent establishment within the group.
• Generating Australian-sourced aggregated turnover of A$10 million or more during the relevant reporting period.

Information to be disclosed publicly

Unlike traditional CbC reports, which are exchanged confidentially between tax authorities, the information required under Australia’s public CbC regime will be published on a government website as soon as practicable following lodgement.

Affected groups must disclose:

• The names of all entities that form part of the CbC reporting group.
• A description of the group’s tax strategy or “approach to tax”.
• For each jurisdiction in which the group operates: 
  • The nature of its business activities.
  • The number of full-time employees.
  • Revenue from related-party and third-party sources.
  • Profit or loss before income tax.
  • Income tax expense recorded in the financial statements.
  • Income tax paid on a cash basis.

For Australia and certain designated jurisdictions, including Singapore, Hong Kong and Switzerland, the required information must be reported separately on a jurisdiction-by-jurisdiction basis. For all other jurisdictions, groups may elect to present the information in an aggregated format.

Compliance obligations and penalties

Responsibility for complying with the public CbC reporting rules rests solely with the CbC reporting parent entity.

Significant penalties apply for late lodgement. Fines commence at A$165,000 per overdue report and can escalate to A$825,000 where the failure to lodge continues beyond 16 weeks.

Key dates

The public CbC reporting rules apply to income years commencing on or after 1 July 2024.
Examples of reporting deadlines include:

• For groups with a 30 June 2025 year-end, the first public CbC report is due by 30 June 2026.
• For groups with a 31 December 2025 year-end, the first report is due by 31 December 2026.

Registration and lodgement requirements

CbC reporting parents should assess whether registration with the Australian Taxation Office (ATO) is appropriate. Although registration is not compulsory, it may be necessary where engagement with the ATO is required, such as requesting an extension of time to lodge.

Public CBC reports must be submitted electronically to the ATO in XML format via email.

Recommended actions for multinational groups

To support readiness for the new disclosure obligations, multinational groups should:

• Determine whether the public CbC reporting regime applies to their group, in consultation with the CbC reporting parent.
• Review information currently included in private CbC reports and identify any additional disclosures required under the public reporting framework, including the group’s approach to tax.
• Develop processes to collect and validate information that is not currently captured for private CbC reporting purposes.
• Ensure sufficient time is allocated for the preparation, review and governance of public disclosures before the relevant filing deadline.
   

Disclaimer

This article provides general information only and is intended to assist readers in understanding reporting reuqirements. It does not constitute tax or legal advice. Specific advice should be sought based on individual circumstances.

If you would like advice specific to your circumanstances, please contact PKF Melbourne.