On April 6, 2023 the Australian Treasury opened a public consultation regarding exposure draft legislation to introduce a public country-by-country (CBC) reporting obligation for multinational entities for income years commencing from July 1, 2023 and accompanying explanatory material. Interested parties are invited to comment on this consultation. The consultation periods runs until April 28, 2023.
The draft legislation arranges that within 12 months after the end of the income year the CBC reporting parent is required to publish selected tax information that relates to itself and its CBC reporting group. Broadly, the information required to be published relates to presence and tax dealings across jurisdictions and should provide a picture of how the entity structures its tax affairs in Australia and globally.
The CBC reporting parent will fulfil its requirement to publish the selected information by providing the information in the approved form to the Commissioner, for the purpose of the information being made public. The Commissioner will then make the information available on an Australian government website as soon as practicable.
The CBC reporting parent is required to publish the names of each entity in the CBC reporting group and a description of the group’s approach to tax. In addition, for each jurisdiction the CBC reporting group operates in, the CBC reporting parent must publish, at a group level:
- a description of main business activities;
- number of employees;
- revenue from unrelated parties;
- revenue from related parties;
- expenses from related party transactions;
- profit and loss before income tax;
- a list (including the value of) intangible assets;
- a list (including the value of) tangible assets;
- income tax paid (on cash basis);
- income tax accrued (current year);
- effective tax rate;
- the reasons for the difference between income tax accrued (current year) and the amount of income tax due if the income tax rate applicable to the jurisdiction were applied to profit and loss before income tax; and
- the currency used in calculating and presenting the above information.
The combination of information required to be published is intended to provide the public with a comprehensive picture of the CBC reporting group’s tax affairs while minimising the compliance and administrative burden imposed on the CBC reporting parent.
How To Respond
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Post
Director
International Tax Branch
Corporate and International Tax Division
Treasury
Langton Cres
Parkes ACT 2600
The exposure draft legislation to introduce a public country-by-country (CBC) reporting obligation for multinational entities can be found here.
The accompanying explanatory material can be found here.
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