Australian public country-by-country reporting Bill progress update

At a glance

• Senate Committee has recommended that the Bill which includes the PCbCR measures should be passed by Parliament.
• New disclosures apply in respect of financial reporting periods commencing on or after 1 July 2024.
• Application to certain groups with more than $1bn revenue with an Australian income de minimis and scope to apply for exemptions.
• Disclosure on country-by-country basis for Australia and specified jurisdictions.
• Aggregation of information is allowed for other jurisdictions.
• Significant penalties for noncompliance.
• How EY can help.

The recommendation by a Senate Committee that the Bill which includes the proposed Australian public country-by-country reporting measures (PCbCR) should be passed by Parliament has moved these measures another step closer to reality.

Australia’s PCbCR requires certain large Australian groups and Australian and foreign-owned multinational enterprises (MNEs) to prepare certain information on a country-by-country basis for public release by the Australian Taxation Office (ATO) for the 2024/25 and later financial years.

Australia’s public CbCR regime will be the most comprehensive PCbCR regime globally and additional work will be required by covered groups to comply compared to disclosures for confidential CbCR and under the EU PCbCR directive. Significant administrative penalties may apply for late lodgement and criminal penalties may apply for non-compliance in some circumstances.

The measures are part of the Government’s Multinational Tax Integrity and Transparency Plan announced in the 2022-23 Federal Budget (following its election commitment). They follow the new financial statement additional disclosure of subsidiary information measures, including their tax residence, by Australian public companies, applicable from the 2023/24 year.

The Senate Economics Legislation Committee’s (SELC) report following its inquiry into the Bill was published on 2 August 2024. The Bill was introduced into Parliament on 5 June 2024 and is currently before the Senate. After considering submissions the SELC concluded that the PCbCR (and the other Bill measures) should be passed as introduced.

The Bill includes only a limited number of changes from the second exposure draft issued in February 2024, notwithstanding submissions from EY and others. In particular the information to be disclosed, the compulsory use of statutory financial statements and the commencement date are unchanged.

The proposed rules are very wide in scope and will require careful review by impacted groups to determine their application and potentially significant work to ensure systems are in place to comply with these new reporting obligations.

Notwithstanding the timeline for providing the first reports, groups must understand now if they will subject to the disclosures and should start implementing systems to capture and report the required information, which will potentially involve teams across multiple jurisdictions, before the end of the 1st reporting year.