The Australian Taxation Office (ATO) has made LCG (Law Companion Guideline) 2015/3 – Subdivision 815-E of the Income Tax Assessment Act 1997: Country-by-Country reporting available on its website. According to an announcement made by the ATO in this respect, it developed the guideline in consultation with industry to help the public understand how the ATO will apply the Country-by-Country (CbC) reporting rules, which adopt the OECD's new transfer pricing documentation standards into Australian law.

Under CbC reporting, multinationals operating in Australia with an annual global income of $1 billion or more are required to provide the ATO with three reports about their global financial activities:

·        the CbC report;

·        a master file; and

·        a local file.

CbC reporting applies to income years starting on or after 1 January 2016.

According to the ATO, the guideline sets out the ATO’s overall position on CbC reporting, and provides an outline of the new reporting requirements, including:

·        when the requirements apply if you are a significant global entity with an annual global income of A$ 1 billion or more

·        an overview of what information you need to give us in the three statements – the CbC report, the master file and the local file

·        when you can apply for an exemption from the reporting requirements, and the relevant factors we will take into account in assessing your application.

The Law Companion Guideline on Country-by-Country reporting discusses a.o. the following subjects:

·        Outline of the new law

o       Necessary conditions for CbC reporting to apply

·        Specific issues for guidance

o       Meaning of 'annual global income'

§        Amount(s) included in annual global income

o       Exemptions

§        Advanced Pricing Arrangements (APA) and Annual Compliance Arrangements (ACA)

§        Applications for exemption

o       Approved forms and periods for lodgment

o       Penalty mitigation

§        Reasonably arguable position

o       The CbC report and master file

§        Information requirements

§        Parent entities in jurisdictions with CbC reporting requirements

§        Parent entities in jurisdictions without CbC reporting requirements

o       Local file

§        Information requirements

§        Inclusions list

§        Materiality standards

o       Other reporting and documentation requirements

§        International Dealings Schedule (IDS)

§        Subdivision 284-E documentation

o       Future guidance

Click here to be forwarded to the Law Companion Guidelines: LCG 2015/3 – Subdivision 815-E of the Income Tax Assessment Act 1997: Country-by-Country reporting as available on the website of the ATO, which will open in a new window.

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