Australia is entering a new phase of corporate tax transparency, with the introduction of the Public Country-by-Country Reporting (Public CBCR) regime.
Effective for income years commencing on or after 1 July 2024, these rules mandate large multinational enterprises (MNEs) to publicly disclose detailed tax and financial information on a jurisdictional basis. This move aligns Australia with global efforts to enhance tax transparency and combat base erosion and profit shifting (BEPS).
This article explains the scope of the new Public CBCR regime, its compliance obligations, what exemptions may exist, and other practical considerations for businesses.
Background and Policy Objectives
The Public CBCR regime builds on the OECD/G20 BEPS Action 13 initiative, which introduced confidential CBCR reporting to the Australian Taxation Office (ATO).
The objective of this new measures is to enhance transparency, as well as improve comparability and accessibility of information to help the public, including investors, to compare entity tax disclosures. This regime also aims to help the public to better assess whether an entity’s economic presence in a jurisdiction aligns with the amount of tax they actually pay in that jurisdiction.
Unlike the confidential CBCR regime, Public CBCR reports will be published on an Australian Government platform, making sensitive tax data accessible to the public. This represents a significant shift in how tax information is shared and therefore able to be scrutinised.
Who Is Affected?
Entities must comply with the public CBCR if they meet all of the following criteria:
- A CBC reporting parent for the preceding period (i.e. same definition under confidential CBCR regime. Broadly, global consolidated revenue of AUD 1 billion or more) and not the Australian subsidiary unless in certain exceptional circumstances.
- Australian-sourced income of AUD 10 million or more.
- Are a constitutional corporation (i.e. a foreign corporation (one that is not formed within Australia), or a trading or financial corporation formed within the limits of the Commonwealth), or a trust (i.e. each of the trustees must be a constitutional corporation) or a partnership (i.e. each of the partners must be a constitutional corporation).
This applies to both Australian-headquartered groups and foreign MNEs with Australian operations, making it one of the most comprehensive transparency measures globally.
Reporting Periods and Deadlines
The Public CBCR regime applies to reporting periods starting on or after 1 July 2024.
The relevant reports must be lodged within 12 months after the end of the reporting period. Illustratively, for an MNE with a 31 December 2025 year-end, the Public CBCR report must be filed by 31 December 2026.
Please note that punitive administrative penalties, similar to those applicable to confidential CBCR regime, apply to non-compliance with an entity’s Public CBCR obligations.
What Must Be Disclosed?
The Public CBCR report requires:
- A Tax Approach Statement outlining the group’s tax governance and strategy.
- Jurisdictional data for Australia and specified countries (Currently 40 jurisdictions.
Refer to Taxation Administration (Country by Country Reporting Jurisdictions) Determination 2024 for list of these jurisdictions). For other jurisdictions, it can be either on aggregated basis or jurisdictional basis.
The data to be provided includes the following:
– Revenue (related and unrelated party).
– Profit or loss before income tax.
– Book value of tangible assets.
– Income tax accrued and paid.
– Number of employees.
– Nature of business activities.
– Explanation for discrepancies between tax expense and headline tax rate.
The data must be based on the audited consolidated financial statements of the global parent entity.
Prescribed Format
The ATO has yet to publish the final format which will be required for the Public CBCR report but they have recently provided instructions on the lodgement process, includingthe following:
- The Public CbC report is to be prepared 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 XML Schema‘s specifications.
- The report is to be emailed to the ATO at PublicCBCReports@ato.gov.au.
- The ATO will validate the submission and advise if it is complete or if there are any errors or omissions that requires correction and re-submission.
Exemptions and Relief
The Legislation grants certain power to the ATO to provide partial or full exemption from the public CBCR regime to certain entities.
The following are examples of the kind of matters appropriate for exemption consideration, as indicated in the Explanatory Memorandum to the Legislation that introduces the Public CBCR regime, including:
1. Impact on national security.
2. Breach of Australian law.
3. Breaching the laws of another jurisdiction, or
4. Revealing commercially sensitive information.
When applying for exemption, the ATO has advised that taxpayers should provide the following information:
- If requesting a full exemption, the reasons why a partial exemption would not be sufficient.
- Explain what is unusual or exceptional about the group circumstances to justify an exemption.
- Detail any link between the specific disclosure or disclosures for which an exemption is requested and any harm or adverse consequences that might be caused by public disclosure.
- Explain why the delay in publication of information under Public CBC reporting doesn’t sufficiently reduce the potential harm or consequences that might be caused by public disclosure.
- Explain if aggregation of the information is available, why that aggregation doesn’t sufficiently reduce the harm or consequence of disclosure, and
- Why the information for which the exemption is requested is not and isn’t expected to become publicly available in full or part through other reporting obligations or channels.
How the ATO will consider the exemption application is currently detailed in the ATO’s draft guidance (PS LA 2025/D1 Public country-by-country reporting exemptions) which is subject to public consultation and expected to be finalised soon.
Key Comparison with Confidential CBCR
As the Public CBCR regime contains+ additional obligation on top of the confidential CBCR, we have outlined in the table below the key comparisons between Public and Confidential CBCR as per below:
| Feature | Public CBCR | Confidential CBCR |
| Legislative Basis | Sections 3D, 3DA and 3DB of Taxation Administration Act 1953. | Subdivision 815-E and section 815.355 of Income Tax Assessment Act 1997. |
| Purpose | Public transparency for stakeholders. | Confidential reporting to ATO mainly for transfer pricing risk assessment. |
| Content Required | Tax approach statement, jurisdictional tax and financial data. | Three statements: (i) CBC Report – allocation between countries of the income and activities of, and taxes paid by the Group. (ii) Master File – global operations and activities, and the pricing policies relevant to transfer pricing, and (iii) Australian Local File – business and transfer pricing information of the Australian entity. |
| Disclosure | Will be publicly available on data.gov.au website. | Confidential – submitted to ATO only. |
| Applicability Threshold | Annual global income ≥ AUD 1 billion and Australian-sourced income ≥ AUD 10 m. | Annual global income ≥ AUD 1 billion. |
| Reporting Entity | CBC reporting parent (including foreign corporation where its member includes an Australian resident entity or PE). | Australian entity that is a CBC reporting entity or member of CBCR group. |
| Effective Date | Income years starting on or after 1 July 2024. | Income years starting on or after 1 January 2016. |
| Lodgement Deadline | 12 months after end of reporting period. | 12 months after end of income year. |
| Penalties for Non-Compliance | Subject to administrative penalties under Division 286, Schedule 1 of Taxation Administration Act 1953 (can be up to 500 times than standard penalty). | Subject to administrative penalties under Division 286, Schedule 1 of Taxation Administration Act 1953 (can be up to 500 times than standard penalty). |
| Exemptions | Possible for reason such as commercial harm or impact to national security. | Possible under ATO discretion (e.g., entity exited CBC group or parent reports in exchange jurisdiction). |
| Administrative registration | Registration with the ATO is not compulsory but highly encouraged to streamline process. Registration is by submitting Public CBC registration form (NAT 75645‑08.2025). | Registration is not required. |
Practical Challenges for MNEs
Implementing Public CBCR will require significant preparation, and consideration of the key inputs to this new process, including:
- Data readiness: Systems must capture granular tax and financial data across jurisdictions.
- Consistency: Align disclosures with OECD CBCR and Pillar Two reporting to avoid discrepancies.
- Governance: Boards should review tax approach statements for reputational implications.
- Technology: Consider tools for automation and compliance monitoring.
Action Steps for Businesses
1. Assess applicability: Confirm thresholds and group structure.
2. Register with ATO: While not mandatory, registration streamlines compliance.
3. Prepare systems: Implement processes for data collection and validation.
4. Draft tax approach statement: Ensure alignment with corporate governance principles.
5. Monitor global developments: Especially EU and OECD updates for consistency.
Conclusion
Public CBCR represents a paradigm shift in tax transparency. For large MNEs, compliance is not just a regulatory obligation but a reputational imperative. Early preparation, through robust systems, governance frameworks, and proactive engagement with the ATO, will be key to meeting these new requirements confidently and adequately managing the new tax transparency risks.
Andersen Australia can assist with readiness assessments, data strategy, as well as preparation and lodgement of Public CBCR reports with the ATO. Contact our tax team to discuss how we can help you navigate this new era of transparency.
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