Bill to implement country-by-country reforming, BTR reforms enter Parliament
The bill to introduce Australia’s public country-by-country regime and incentives for build-to-rent developments has been introduced into the House of Representatives.
On Wednesday, the government introduced the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024, which implements a range of measures including the country-by-country reporting regime and build-to-rent incentives.
The country-by-country reporting regime will require large multinational enterprises operating in Australia to publish selected tax information on a country-by-country basis for the jurisdictions in which they operate.
Once passed, the regime will apply to entities with an annual global income of $1 billion or more, and with at least $10 million of Australian-sourced (aggregated) turnover.
Assistant Treasurer Stephen Jones said public country-by-country reporting will provide the community with a better understanding of how much tax multinationals pay relative to their activities.
“It puts the onus on large multinationals to be upfront about where they pay tax and how much they plan their tax strategies,” he said.
“Public country-by-country reporting represents a major step forward for tax transparency and maintains global momentum towards improved tax integrity.”
Jones said exemptions will be available to protect entities from disclosing commercially sensitive data or data with national security implications.
“However, to ensure the integrity of the public country-by-country reporting regime, the exemptions will be at the discretion of the Commissioner of Taxation,” he said.
“The Australian Taxation Office will provide comprehensive guidance on this exemptions process to assist taxpayers in complying with the new regime.”
The regime is set to apply from 1 July 2024 and will require entities to publish their first public country-by-country report within 12 months after the end of the first reporting period.
The bill also introduces new tax incentives to encourage investment and construction in the build‑to‑rent sector.
Treasurer Jim Chalmers said build-to-rent developments are designed to be rented out rather than sold to individual buyers.
The new tax incentives will apply to build‑to‑rent projects, consisting of 50 or more apartments or dwellings, made available for rent to the general public.
The dwellings must be retained under single ownership for at least 15 years and a minimum of 10 per cent of dwellings in a development need to be made available as affordable tenancies.
Minister Jones said for eligible new build-to-rent developments, the final withholding tax rate on eligible fund payments from managed investment trust (MIT) investments will be reduced from 30 per cent to 15 per cent.
“The depreciation rate for capital works in eligible build-to-rent developments will also be increased from 2.5 per cent to four per cent per annum. This will cut the depreciation period from 40 years to 25 years for eligible developments,” he said.
Minister Jones said similar models have been used successfully overseas to increase housing supply and are designed to supplement and not replace other forms of rental housing or home ownership.
"Build-to-rent is still a nascent industry in Australia and to date has generally been more focused on luxury developments," he said.
"Our changes are intended to increase rental housing supply more broadly, including in the area of affordable housing."
