Executive summary

On 28 November 2024, the Australian public country-by-country reporting (PCbCR) regime was passed by all stages of Parliament without amendment. The PCbCR regime now awaits Royal Assent (included in the omnibus Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024).

New PCbCR regime

Australia's PCbCR regime will require certain large multinational enterprises (CbC reporting parents) and purely domestic Australian groups that have annual global consolidated income of AU$1b or more in the previous year (a de minimis exception of >AU$10m Australia-sourced income applies) to publish selected tax information on a CbC basis for Australia and specified jurisdictions and, on either a CbC basis or an aggregated basis, for the rest of the world. The AU$1b threshold (approximately US$650m and €620m) is significantly lower than the CbCR threshold in the European Union (EU), United States (US) and many other countries.

The information is to be published on an Australian government website, with publication facilitated by the Commissioner. The rules apply for financial reporting periods commencing on or after 1 July 2024, with the first report due by 30 June 2026 (by 12 months after the financial period end). Exemptions from disclosing some or all information may be granted on a class or entity basis. Significant penalties apply for late reporting or failure to report and if material errors are not corrected in time.

A final instrument providing the specified jurisdictions list has yet to be published. The Australian Tax Office (ATO) will also need to develop its information collection platform and provide guidance on the rules. Note that an ATO Law Administration Practice Statement concerning the exemption application is under development with an expected completion date in March 2025.

Implications

Affected groups will need to ensure systems are in place to comply with these new reporting obligations. Multinational groups will need to develop a worldwide approach to comply with other reporting regimes, notably including the EU's CbCR directive that is now being enacted by member states.

This additional public reporting will also require covered entities to educate their boards, align this reporting with their current environmental, social and governance (ESG) policies and prepare for transparency to have a potential impact across a wider group of stakeholders, including tax authorities, corporate regulators (in Australia and overseas), investors, short sellers, journalists and nongovernmental organizations.