The Australian Taxation Office (ATO) has released for consultation draft instructions for completing the public country-by-country reporting (PCbCR) annual report form (Public CbC report).

This follows the recent ATO release of the XML approved schema for report submissions with accompanying business implementation guide instructions.

The PCbCR rules are broad in scope (impacting both large Australian groups and large foreign groups with Australian operations). The first Public CbC reports to the ATO are due by 30 June 2026 and the ATO will subsequently publish them on data.gov.au. Completion of reports may require extensive preparatory work to be able to identify the necessary information. The global parent entity (the PCbCR parent) is the entity required to submit the report, regardless of whether it is an Australian or overseas entity.

Groups must consider whether the regime applies to them, including assessing threshold questions to determine if they are subject to the disclosures. If the answer to that question is yes, considerations include:

• Determining whether the group should apply for an exemption request with the ATO for the 2025 year, in which case regard should be given to the ATO's draft instructions for ATO staff to follow when evaluating such requests (see draft Law Administration Practice Statement PS LA 2025/D1)
• Completing the ATO registration form for PCbCR parents who will be required to provide Public CbC reports
• Noting that the reporting regime will require large multinational enterprises with Australian-sourced income of AU$10m or more to publish specified information on a CbC basis; whether the AU$10m threshold is met which is determined by an aggregated turnover test
• Determining whether the group's systems and processes are in place to provide the ATO with the necessary information by the due date, including to assess gaps in information, for example, for the approach to tax, description of activities, related party revenue from outside the jurisdiction and explanation of difference between tax accrued and profit before tax multiplied by the standard tax rate

The draft ATO instructions:

• Provide step-by-step practical guidance for preparers, with a general overview and six more detailed sections
• Clarify how to complete each section and field in the report form, including where exemptions have been obtained
• Address some common scenarios in determining disclosures

There is overlap of information with the ATO's business implementation guide and the two documents should be used together: the business implementation guide for technical XML schema compliance, and the instructions to assist practical completion.

The draft instructions are open for comment until 28 November 2025; EY Australia is engaging with the ATO on the content and suggestions for clarifications and improvements.

While the instructions include many valuable comments on the application of the law, they are not an ATO guidance product and so do not include detailed ATO views on technical elements of the rules. The report instructions are summarized below (in the final section of this Alert).

For more information on the PCbCR rules and the ATO's draft Practice Statement PS LA 2025/D1 (PS LA) for exemption requests, see EY Global Tax Alert, Australian Taxation Office issues draft guidance for public country-by-country reporting exemption applications and registration form, dated 8 July 2025.

The final version of the ATO's draft PS LA 2025/D1 (issued July 2025) regarding exemption requests has not yet been published.

PCbCR threshold issues

It is essential for groups to consider threshold requirements to determine whether the PCbCR regime applies.

Note the ATO has not issued any detailed guidance on the threshold issues for:

• Inclusion under the "constitutional corporations" rule
• Who is a member of a "country-by-country reporting group" for the regime
• The AU$10m of Australian sourced, third-party turnover threshold

If a group determines that the PCbCR rules do not apply to it because the group does not meet one or more of the threshold requirements, the group must ensure its position is carefully documented for penalty protection purposes as a reasonably arguable position.

Some groups might consider seeking binding private rulings from the ATO on the application of the rules to their circumstances.

Requirement to be a "constitutional corporation"

A key threshold requirement for Australia's PCbCR regime is that the entity is either a:

• Constitutional corporation
• Partnership in which each of the partners is a constitutional corporation
• Trust of which each of the trustees is a constitutional corporation

The Australian Constitution provides that the Federal Parliament has the legislative power to make laws with respect to "foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth." This restricts the types of organizations over which the Federal Parliament is able to make valid law.

In non-tax contexts, the courts have found that an entity is not a "foreign corporation" merely because of its classification under foreign law, but by reference to substantive legal attributes. These include, but are not necessarily limited to, independent legal personality and capacity to own property, contract, sue and be sued in its own name.

Multinational groups that are not ultimately owned by or through traditional corporate structures, such as foreign limited partnerships, need to consider this threshold requirement closely. Practical challenges faced by such groups include determining whether the PCbCR regime applies and, if so, which entity is the ultimate parent entity and what needs to be disclosed.

Requirement for the existence of a group

One of the Australian public CbCR requirements is that the CbCR entity is a member of a "country-by-country reporting group" at any time during the reporting period. This requires the identification of a group of entities that either:

• Is consolidated for accounting purposes as a single group
• Would be required to be consolidated for accounting purposes as a single group if another entity in the group were a listed company

This threshold requirement needs to be closely examined by entities, such as investment funds, that might not be a part of a consolidated group for accounting purposes. This may require an extensive review of ownership and ownership relationships.

Requirement for AU$10m of Australian-sourced, third-party turnover

A key threshold requirement for the PCbCR regime is that the sum of "aggregated turnover" for an income year "from an Australian source" is AU$10m or more. Broadly speaking, "aggregated turnover" is the sum of the annual turnover of an entity and its related parties excluding amounts derived from related-party dealings.

In ordinary circumstances, a multinational group with an Australian subsidiary with less than AU$10m of third-party revenue is unlikely to be required to publicly disclose its CbCR.

However, a multinational group may still be required to publicly disclose its CbCR if one of its foreign members:

• Has AU$10m or more of Australian-sourced income
• Attributes AU$10m or more of income to an Australian branch

This issue should be given close attention by any group looking to rely on the de-minimis exception and especially multinational groups:

• With no Australian subsidiary or an Australian subsidiary that recognizes less than AU$10m of income — this is commonly an issue for certain business models, such as private capital and liquidity trading, where there might be no or limited physical presence in Australia but substantial share or derivate trading in, or lending or equity investment into, Australia
• In which the Australian subsidiary is entirely (or almost entirely) remunerated through related-party dealings — this may be a consideration for multinational groups for which "routine" activities are performed in Australia and remunerated on a "cost plus" basis

Draft ATO instructions summary

Section A: Entity information

The information in Section A is necessary for ATO administration purposes; EY Australia has clarified with the ATO that the information does not form part of the published report. Similarly, the ATO has confirmed that if there is a full exemption, nothing needs to be submitted.

The instructions confirm that the Global Reporting Initiative GRI-207: Tax 2019 standard is the leading guidance and takes precedence over Organisation for Economic Co-operation and Development (OECD) guidance.

Section A includes instructions on reporting entity declarations, report years and public global parent details.

The form asks for the reporting entity's ATO reference number (ARN) or alternatively its Australian Business Number (ABN). Note that an entity without an ABN or ARN will only be issued a ARN for PCbCR where they lodge the ATO PCbCR registration form.

Section B: Member entities and approach to tax

The information in Section B includes guidance on listing member entities of the CbCR group, including the reporting entity, and the approach to tax.

The data field for the approach to tax is a maximum of 5,000 characters. If this is not sufficient, text for a plain text URL reference to refer readers to a web page for additional information can be included. The ATO requires that the reference is to provide additional information and not an alternative to providing an approach to tax overview.

Section C: Australia and specified jurisdictions

Section C outlines how information for Australia and specified jurisdictions is to be determined and reported for each data field requirement. A separate Section C must be completed for Australia and each specified jurisdiction; if a choice is made to report on a CbC basis for all jurisdictions, a separate Section C must also be completed for those other jurisdictions.

Section C also includes guidance for consolidating information of multiple members in a single jurisdiction.

Section D: Rest of the world (aggregated information)

Section D outlines how information for non-specified jurisdictions is to be determined and reported for each data field requirement if a choice has not been made to report all jurisdictions on a CbC basis.

The instructions are similar to those in corresponding items in Section C; however they clarify that information is reported on a consolidated or aggregated basis. There are reduced disclosures for aggregated information compared to disclosure on a CbC basis.

Section E: Submitting a Public CbC report

The instructions confirm:

• The Public CbC report must be submitted electronically as a valid XML file generated by business management software. The XML file must conform to the structure, rules and data types defined in the ATO-developed XML Schema.
• The report is to be emailed to the ATO.
• The ATO will validate the submission and advise if it is complete for publication or if there are any errors or omissions and therefore cannot be published.

Section F: Correcting a Public CbC report

Material errors must be corrected within 28 days of the reporting entity becoming aware of the error.

The instructions advise that to amend a Public CbC report, the entity must complete the approved form again with the corrected information and submit it using the same reporting submission process. All fields must be completed in the amended report, including fields that have not been changed.

The instructions do not include any further information regarding what is "material" for requiring corrections or when the ATO would consider that an entity should have become aware of the need to correct. Given the substantial penalties for not correcting errors in the required time it will be vital for groups to monitor events subject to lodgment and to quickly analyze whether a corrected report must be submitted. ATO extensions for submission of corrections for material errors may be available upon application.