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February 13, 2024

Australia revises draft legislation for public country-by-country reporting

  • Revised draft legislation contains a new requirement for large multinational entities to prepare certain information on a country-by-country basis for public release by the Australian Taxation Office.
  • Comments on the revised draft law are due by 5 March 2024.
  • Commencement of the new requirements is deferred by 12 months for financial reporting periods commencing on or after 1 July 2024.
  • The draft law provides a threshold of AU$10 million or more for Australian-sourced aggregated turnover.
  • The amount of information required to be disclosed is reduced, compared to the previous draft law.
  • Aggregation of information is allowed for countries, unless a country is listed (listed countries include Hong Kong, Switzerland and Singapore).
  • An updated penalty section is also provided.

Executive summary

Treasury has released for consultation a revised exposure draft (ED) law for the proposed Australian public country-by-country reporting (PCbCR) measures (on Treasury's website here). These additional tax transparency measures were announced in the 2022-23 Federal Budget.

Australia's PCbCR requires large multinational entities to prepare certain information on a country-by-country basis for public release by the Australian Taxation Office (ATO). The measures will affect both Australian multinational enterprises (MNEs) and foreign-owned MNEs for the 2024-25 and later financial years.

This revision follows consultation on the April 2023 ED and includes some welcome refinements responding in part to submissions by EY and others, intended to more closely align the Australian requirements with the European Union's public country-by-country reporting (CbCR) regime.

However, Australia's public CbCR regime will remain one of the most comprehensive public CbCR regime globally and additional work will be required by covered groups to comply. As currently drafted, the requirements continue to apply to entities that are below the CbCR threshold in their home jurisdiction, but above the Australian threshold.

Key changes in the revised ED, compared to the previous draft, include:

  • The measures apply to financial reporting periods commencing on or after 1 July 2024 (as previously announced).
  • An additional threshold provides that an entity is only subject to reporting if AU$10 million or more of their aggregated turnover for the income year is Australian-sourced.
  • Information required to be disclosed is reduced compared to the previous draft.
  • Aggregation of information is allowed for countries, unless a country is designated a specified country (specified countries include Hong Kong, Switzerland and Singapore).
  • An updated penalty section puts beyond doubt that significant penalties will apply for not timely providing the required information.

The proposed changes are very wide in scope and may apply to many organizations. As such, they will require careful review to determine their application. Impacted groups will need to ensure systems are in place to comply with these new reporting obligations, as heavy penalties can apply for noncompliance.

Key highlights

Where the rules apply, the CbCR parent will be required to provide selected tax information to the Commissioner of Taxation in an approved form within 12 months of the end of the relevant financial year, which the Commissioner will publish on an Australian government website. The CbCR parent must also notify the Commissioner of any material errors in that published information within 28 days of becoming aware of them and provide the correct information; nonmaterial errors may be corrected through the same process.

Reporting requirements

The revised ED includes a number of welcome changes, such as reducing the information to be provided including some commercially sensitive information (e.g., a list of all intangible assets).

The revised proposed reporting requirements are:

  • The CbCR parent must publish general information, including the group's approach to tax.
  • For Australia and each specified jurisdiction in which the CbCR group operates, the CbCR parent must publish, at a group level, certain information (set out in the table below).
  • For the non-specified jurisdictions, the group has the choice of publishing the same information for all jurisdictions or publishing slightly reduced information on an aggregated basis for all non-specified jurisdictions.

A draft instrument proposes an initial list of 41 specified jurisdictions, which the draft explanatory material states were selected because they tend to be associated with tax incentives, tax secrecy and other matters likely to facilitate profit-shifting activities. The list includes various "tax havens" as well — in particular, Hong Kong, Singapore and Switzerland. The list excludes Cyprus, Ireland, Luxembourg and the Netherlands as they are in the European Union (EU) and may be subject to the EU CbCR.

The specified jurisdictions overlap to a certain extent with the EU black and grey lists (for example Hong Kong and several tax havens are on both lists), but there are also differences. For instance, Singapore and Switzerland only appear on the Australian PCbCR list and other countries, such as the Russian Federation, only appear on the EU lists.

The revised ED better aligns with the EU regulations in relation to both the items covered and the ability to aggregate non-specifically listed countries.

Despite the welcome changes, the Australian PCbCR legislation remains extensive.

It has maintained the "approach to tax" as a document to be provided by the CbCR parent and refers to guidance set out in the voluntary accounting standard Global Reporting Initiative GRI 207.1.

The approach to tax is to be defined at a group level — covering all relevant jurisdictions — which will require a consolidated assessment and formal descriptions of how all entities within the group approach tax. For countries with existing tax governance requirements, this may be straightforward. However, for entities in countries whose regulators do not require formalized tax governance, the approach to tax may need to be formalized.

The legislation continues to require an explanation of the difference between tax accrued and profit before tax multiplied by the country tax rate. Those that have undertaken preparation for BEPS 2.0 will note this is a complex process.

Another item is the requirement to disclose revenue from related parties that are not tax residents of the jurisdiction. Although this is consistent with GRI 207.4 and companies reporting to this standard may have the information available, many companies will not have an existing obligation to produce this information as they have not adopted this standard and therefore may not have an existing process in place to gather and produce this information.

The full list of disclosures is below.

Information required to be reported

CbCR parent

Australia + specified jurisdictions

- Per jurisdiction

Other jurisdictions

- Aggregated data

Name of the entity

Jurisdiction name


Names of other entities in group

Main business activities

Main business activities

Approach to tax

Number of employees

Number of employees


Revenue from third parties

Revenue from third parties


Revenue from related parties that are not tax residents of the jurisdiction

Revenue related party that are not tax residents of the jurisdiction


Profit (Loss) before tax

Profit (Loss) before tax


Book value of tangible assets (other than cash)

Book value of tangible assets (other than cash)


Income tax paid (cash)

Income tax paid (cash)


Income tax accrued (current year)

Income tax accrued (current year)


Reasons for difference between income tax accrued and profit before tax multiplied by the country tax rate


Currency used in calculating and presenting information

Currency used in calculating and presenting information

Additional requirements may be added by regulation.

The draft EM lists an additional requirement to publish a link to the country-by-country group's EU CbCR. However, this is not evident in the current ED drafting.

Affected taxpayers

The new legislation essentially applies to all MNE groups that have a presence in Australia and have a global consolidated revenue in excess of AU$1 billion, where the entity or another member of the CbCR group is either an Australian resident or a foreign resident who operates an Australian permanent establishment. The filing obligation applies to the global parent entity, regardless of whether that entity is Australian or foreign.

The revised ED adds a new threshold so that reporting only applies to groups that have more than AU$10 million in Australia-sourced income.

The legislation also allows the Commissioner to exempt classes of entities and to provide exemptions for specific entities. Although the legislation seems to indicate that certain types of government entities might be exempted, it is expected that other exemptions will be limited.

A continuing concern is that the revised proposal still does not make an allowance for companies that do not meet the CbCR thresholds in their home jurisdiction. Australia has one of the lowest, if not the lowest, CbCR threshold at AU$1billion. This threshold is significantly lower than the threshold in many other jurisdictions. Accordingly, some organizations may not have any CbCR requirements anywhere in the world and will have to prepare all information from scratch. Based on current conversion rates the Australian threshold equates approximately to the following:

  • €600 million
  • US$650 million
  • 4.69 billion Chinese Yuan
  • 97 billion Japanese Yen


Failure to comply with the new disclosure requirements may result in the imposition of penalties.

Failure to lodge on-time

The revised ED includes new specific penalty provisions for providing the CbCR information late. The penalties are 500 penalty units (AU$165,000 at proposed new rate of AU$330 per penalty unit1) per part of 28 days late up to a cap of 2500 penalty units (AU$825,000 at proposed new rate). These penalties also apply if material errors are not notified to the Commissioner for correction with the required 28 days.

Failure to comply with requirements under a taxation law

The revised ED still introduces new section 8C(1)(ab) into the Taxation Administration Act, which makes failure to publish the required CbCR disclosures in the prescribed manner a criminal offense.

Conviction would require the Commissioner of Taxation to prosecute in court and carries a maximum fine of 20 penalty units for a first time offender (AU$6,600 at proposed new penalty unit rate), to 50 penalty units (AU$16,500 at proposed new rate) for a third-time offender.

Managing stakeholders

Reporting entities should expect the public, media and nongovernmental organizations to compare their various PCbCR lodgements to look for inconsistencies. In addition, it can be expected that tax authorities will compare the PCbCR with the nonpublic CbCR disclosures. As a result, it will be critical for reporting entities to take a coordinated approach to their PCbCR and nonpublic CbCR requirements. This will include gathering the relevant information, creating the prescribed lodgement files (which can be expected to differ from jurisdiction to jurisdiction), cross checking the disclosures for consistency and lodging these files in the prescribed manner.

Because the public disclosure is managed by the ATO in what is expected to be a limited form of tabulation, the full story as to why a particular jurisdiction may appear to have a low tax burden may not be apparent from what the ATO publishes (e.g., carryforward tax losses, home country controlled foreign company or Pillar Two pickup elsewhere, etc.), so groups may want to consider their own additional forms of contemporaneous disclosure to better inform stakeholders.

There is also a global focus on sustainability across many industries where stakeholders, including tax authorities are requiring a greater degree of public tax reporting. Given the need to align across multiple domestic reporting frameworks and various documents and the limited ability to provide context, many companies may consider whether to incorporate their approach to the PCbCR into a wider sustainability and tax agenda.

Next Steps

Treasury is inviting submissions on the revised ED Law by 5 March 2024.

Given the far-reaching effects, including the extraterritorial effect and the significant additional requirements, groups should start to prepare for the new rules.

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1 Proposed increase in penalty unit from AU$313 to AU$330 announced in the 2023-24 Mid-Year Economic and Fiscal Outlook.

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Contact Information

For additional information concerning this Alert, please contact:

Ernst & Young (Australia), Sydney

Ernst & Young (Australia), Melbourne

Ernst & Young (Australia), Perth

Ernst & Young LLP (United States), Australia Tax Desk, New York

Ernst & Young LLP (United Kingdom), Australia Tax Desk, London

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor