ATO to release further CbC reporting guidance
The new reporting regime will require multinationals to disclose their tax arrangements to the public starting in 2026.
The ATO says it will release more guidance on new country-by-country (CbC) reporting rules that compel multinationals to disclose their financial and tax footprint to the public.
In a statement last week, assistant commissioner Michael Ingersoll said the ATO would publish guidance explaining the new regime “soon” and begin stakeholder consultations for guidance on exemptions.
“We’re aware that there’s interest from multinational entities and their advisers about how the ATO plans on administering the exemption regime, and that there may also be other areas where stakeholders have identified topics suitable for ATO guidance,” Ingersoll said.
“We're preparing an explanation of the law that will be published on our website soon, but we're happy to consider other suggestions on topics for guidance, or raise other questions about the administration of the law now.”
The ATO estimates Australia loses out on $11 billion in tax from large corporations every year.
CbC reporting obligations were introduced as part of the OECD/G20 base erosion and profit shifting (BEPS) project to help authorities assess transfer pricing practices and identify tax avoidance risks.
A bill mandating public CbC reporting was passed by Parliament on 29 November. It will apply to large multinationals and domestic Australian groups with annual global consolidated income of $1 billion or more in the previous year.
The rules apply for financial reporting periods commencing on or after 1 July 2024 and require affected entities to disclose their name, the names of other group members, their approach to tax and specific details about their operations.
With the first public CbC report due by 2026, the ATO said it wanted submissions on potential scenarios relevant to the consideration of the Commissioner of Taxation granting or refusing an exemption (full or partial) as it developed an administration practice statement.
It also wanted to know about other topics relevant to public CbC suitable for ATO guidance and questions about complying with the rules.
“The ATO is preparing the administrative arrangements to enable relevant multinational entities to register and publish to the Commissioner the approved form,” the ATO said. “Questions about these arrangements can also be submitted.”
Multinationals will also have to prepare for additional paperwork to comply with the private CbC regime after the ATO’s guidance, released this month, removed previously available exemptions.
“Previously available exemptions for the local file, master file, and CbC report have been reined in with exemptions now only available for the CbC report,” according to Deloitte.
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