On 5 June 2024, the Australian Government introduced the Treasury Laws Amendment Bill 2024 to Parliament. This legislation aims to establish one of the world’s most comprehensive public country-by-country reporting regimes.
KEY PROVISIONS AND SCOPE
Coverage and Applicability:
- The rules apply to large multinational enterprises (MNEs) with an annual global income of AUD 1 billion or more and an Australian presence, either through a resident entity or a permanent establishment.
- These MNEs must also have AUD 10 million or more in aggregated Australian-sourced income.
- The legislation will be effective for reporting periods starting on or after 1 July 2024, meaning the first required reports for December year-end groups will be for the year ending 31 December 2025.
Reporting Requirements:
- MNEs must publicly disclose detailed tax and financial data for each specified country and provide an overview of their tax strategies.
- Required disclosures include the names of each entity in the CbC reporting group, a description of the group’s tax approach, and quantitative tax information for each jurisdiction where the group operates.
- This information will be made available on an Australian government website.
Implementation and Compliance:
- The rules draw heavily on the Global Reporting Initiative (GRI) Standards, specifically GRI 207-1 and 207-4, ensuring alignment with established international reporting practices.
- Non-compliance penalties can reach up to 2,500 penalty units, currently equivalent to AUD 782,500, but expected to increase from 1 July 2024.
Consultations and Balancing Act:
- The Government has conducted extensive consultations to balance transparency with the need to protect commercially sensitive information.
- Exemption requests will be evaluated based on potential impacts on national security, legal compliance, and significant commercial ramifications.
Guidance and Interpretation:
- Guidance materials, including the GRI 207 standards, will be crucial for interpreting the new provisions.
- The legislation allows aggregation of data for non-specified jurisdictions but permits complete disaggregation if groups prefer to report all jurisdictions separately.
Sources/ Recommended Read:
- World leading country-by-country reporting introduced to parliament | Treasury Ministers
- Australia: Public CbC reporting legislation introduced – KPMG United States
- Update on Australian Public Country-by-Country reporting (pwc.com.au)
