Public Country-by-Country Reporting Australia: Does Your Business Need to Disclose Its Tax Information?

Australia’s new Public Country-by-Country (Public CbC) reporting rules require certain multinational groups to publicly disclose information about their income, profits and taxes paid in Australia and overseas.

The rules apply to reporting periods commencing on or after 1 July 2024 and introduce significant new tax transparency obligations for large multinational businesses operating in Australia.

For affected multinational groups, failure to comply can result in substantial penalties and reputational damage.

What is Public Country-by-Country Reporting?

1. Public Country-by-Country reporting is an Australian tax transparency regime requiring certain large multinational groups to disclose information about their global business activities and tax affairs.
2. Unlike traditional CbC reporting, where information is generally provided confidentially to the Australian Taxation Office (ATO), Public CbC reporting makes prescribed information publicly available.
3. The information is submitted to the ATO and published on the Australian Government’s data.gov.au website.
4. The purpose is to increase transparency and allow the public to compare multinational groups’ economic activities with the taxes they pay in different jurisdictions.

Who Must Comply with Public CbC Reporting?

5. Public CbC reporting generally applies where:
   • The relevant reporting parent has annual global income of A$1 billion or more.
   • The multinational group has an Australian resident entity or an Australian permanent establishment during the reporting period.
   • At least A$10 million of the relevant aggregated turnover is Australian-sourced.
   • The reporting parent satisfies the other statutory requirements and is not exempt.
6. The reporting obligation generally rests with the multinational group’s Public CbC reporting parent, which may be located in Australia or overseas.
7. An Australian subsidiary of a foreign multinational group does not ordinarily have a separate Public CbC reporting obligation merely because its parent company is required to report. However, it may need to provide financial and tax information to its overseas parent.
8. Importantly, even a relatively small Australian subsidiary may be part of a multinational group subject to Public CbC reporting.

What Information Must Be Publicly Disclosed?

9. Public CbC reporting requires affected multinational groups to disclose prescribed information, including:
   • The names of entities within the multinational group.
   • The group’s approach to taxation.
   • The nature of its business activities.
   • Revenue from related and unrelated parties.
   • Profit or loss before income tax.
   • Income tax paid and accrued.
   • The number of employees.
   • The value of tangible assets.
   • Explanations of differences between the applicable statutory tax rate and reported income tax accrued.
10. This information can provide the public with a detailed picture of where a multinational group operates, generates profits and pays tax.

Which Countries Must Be Reported Separately?

11. Public CbC reporting does not require identical disclosure for every country.
12. Detailed country-specific reporting is mandatory for Australia and jurisdictions specified under the relevant Commonwealth legislative instrument.
13. For other jurisdictions, multinational groups may generally choose between reporting information separately or on an aggregated basis.
14. This distinction is important because information previously available only to tax authorities may now become accessible to competitors, investors, customers and the general public.

When Are Public CbC Reports Due?

15. Public CbC reports must generally be provided to the ATO within 12 months after the end of the relevant reporting period.
16. For example:

• Reporting period ending 30 June 2025: report generally due 30 June 2026.
• Reporting period ending 31 December 2025: report generally due 31 December 2026.
• Reporting period ending 30 June 2026: report generally due 30 June 2027.

17. The first reports have therefore already become due for some multinational groups.
18. Businesses should identify the reporting period applicable to their group rather than assume that Australian financial-year deadlines apply.

What Are the Penalties for Non-Compliance?

19. Under section 288-140 of Schedule 1 to the Taxation Administration Act 1953 (Cth), failure to provide a required Public CbC report on time can result in an administrative penalty.
20. The penalty is 500 penalty units for each 28-day period, or part thereof, during which the failure continues, up to a maximum of 2,500 penalty units.
21. The monetary amount depends on the applicable Commonwealth penalty unit value.
22. In addition to financial penalties, businesses may face reputational risks arising from the public disclosure of their tax affairs.

Can a Business Obtain an Exemption?

23. Section 3DB of the Taxation Administration Act 1953 (Cth) provides for exemptions from Public CbC reporting obligations.
24. A multinational group may seek an exemption from some or all of its disclosure requirements where the statutory grounds and relevant circumstances justify doing so.
25. Exemptions are not automatic. Businesses concerned about disclosing commercially sensitive information should consider their eligibility before the reporting deadline.

How Can Multinational Businesses Prepare?

26. Businesses potentially affected by Australia’s Public CbC reporting rules should:

• Review their multinational group structure and reporting parent status.
• Determine whether the A$1 billion and A$10 million thresholds are satisfied.
• Identify the jurisdictions requiring separate disclosure.
• Review the accuracy and consistency of financial and tax information.
• Assess whether exemptions may be available.
• Establish appropriate reporting and lodgment procedures.
• Consider reputational and commercial implications before information becomes public.

How Waterhouse Tax Lawyers Can Help

27. Australia’s Public Country-by-Country reporting rules create additional legal and compliance risks for multinational businesses, particularly Australian subsidiaries of overseas groups.
28. Waterhouse Tax Lawyers advises businesses on international taxation, transfer pricing, multinational tax compliance and ATO disputes.
29. We can assist businesses with determining whether Public CbC reporting applies, interpreting their statutory obligations, assessing exemptions and responding to ATO compliance enquiries.