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Public Country-by-Country (CbC) reporting requires certain large MNEs to provide with an annual CBC report which will be made available to the public.

This follows a global push for more transparency from MNE Groups and, in Australia, applies to financial years beginning on or after 1 July 2024 with the reports due for lodgement within twelve (12) months of the end of the applicable reporting period.

The ATO have recently published a registration form for affected MNE Groups and all in-scope entities are encouraged to register.

 Overview of the Public CbC Regime 

In general terms, the information required by the ATO under the new Public CbC rules is broadly in line with that reported by entities who currently have to comply with the confidential OECD CbC reporting framework, which is only made available to taxation authorities. In contrast, under this new regime, the ATO will make the Public CbC report readily accessible to the public with the aim of enhancing ‘tax transparency’.

The Australian Public CbC regime applies to both Australian-headquartered and foreign-headquartered MNEs with an Australian presence. It should be noted that this new regime also applies to domestic groups with no foreign operations which satisfy the requisite reporting threshold discussed below.  

The filing obligation of the Public CbC report lies with the MNE’s parent entity (Public CbC reporting parent). This is one of the major differences with the confidential CbC regime, where the filing obligation rests with the Australian taxpayer.

Broadly speaking, a Public CbC reporting parent is the ultimate parent entity of a group whose annual global income or revenue (as defined by ATO) for the period is A$1 billion or more (circa EUR 560m / USD 648m). The ultimate parent entity will then have to lodge the Public CbC Report with the ATO where a member of the group is an Australian resident or permanent establishment (i.e., branch) and derives Australian sourced income of A$10 million or more.

It is worth noting the Australian threshold for MNEs to be in-scope of the Australian Public CbC rules is substantially lower to those applicable in other jurisdictions – usually EUR 750m. This is particularly relevant for foreign groups that do not meet the local threshold in their home jurisdiction for CbC reporting but may be above the Australian threshold.

For a more detailed run through of the global push for Public CbC, as well as specific commentary for the Australian roll-out, please see the attached webinar. 

 Details on the Public CbC Report 

The ATO have published detailed instructions on the completion of the Public CbC report, including the source of information and content. Further, the information will have to be submitted to the ATO using a standardised approved form (XML Schema).

The Public CbC Report will need to include detailed financial and business information on a jurisdictional basis for Australia and specified jurisdictions (about 40 countries, including some of Australia’s tax treaty partners, such as Switzerland and Singapore), and on an aggregate basis for the rest of the world.

The financial information must be based on audited consolidated financial statements, and whilst the data points required under the Public CbC regime are generally consistent to the information in the confidential CBC reporting, there are some notable differences (for a more in depth dive into the information that will need to be disclosed in a Public CbC Report, have a read of our earlier article on this topic).

 Registration 

Public CbC reporting parents – whether located overseas or in Australia – are encouraged to register with the ATO in advance. Registration allows the parent entity to file the report itself or to designate a representative to do so on its behalf (e.g., Australian representative or tax agent). Further, it also facilitates the requesting of an extension of time or an exemption from lodging the report, when applicable. For the latter, exemptions from publishing some or all the information may be requested on the grounds of national security, breach of other laws, commercial sensitivity, or where the group’s global income is below the threshold in the parent entity’s jurisdiction but falls within Australia’s regime. ATO has full discretion on granting a full or partial exemption after considering the facts and circumstances on a case-by-case basis, having regard to the criteria and process outlined in its draft Law Administration Practice Statement PS LA 2025/D1 on public country by country reporting exemptions. It is intended for the ATO to grant these exemptions only in very exceptional circumstances.

We’d recommend reaching out to us or your registered tax agent for assistance with completing and lodging the registration form.

 Timelines and penalties for failure to lodge 

Public CbC reporting regime applies to periods beginning on or after 1 July 2024, with the reports due for lodgement within 12 months after the end of the relevant reporting period. For illustrative purposes, first lodgement due dates for the following year-ends are included below: 

Failure to lodge on-time carry substantial penalties ranging from A$165,000 up to A$825,000. These penalties also apply if material errors on lodged reports are not corrected within 28 days.

 Some of the main takeaways and action points to consider are: 

• In-scope assessment - Analysing whether you fall within the scope of the new Australian Public CbC reporting rules.
• Reporting period and lodgement - Determining your first reporting period, and first lodgement due date.
• Registration with ATO – Registering with the ATO ahead of your first lodgement, to designate your representative and/or tax agent in and apply for exemptions (if applicable).
• Exemption request - If applicable, consider whether any of the grounds for (full or partial) exemption apply to you, and submit the request with the ATO together with evidentiary documents.
• Data collation - Reviewing the readiness of your data collation strategy and how this aligns with the data already obtained for other reporting obligations like the confidential CbC reporting, EU Public CbC reporting or Pillar Two.

FOR MORE INFORMATION

If you would like to learn more about the topics discussed in this article, please contact your local RSM office.