Client Alert

ATO finalises guidance on Country-by-Country reporting exemptions: Key considerations for multinationals

By:
Keith To,
Jason Casas,
Christine Cornish,
Rashtin Fazal
11 Dec 20254 min read
QUICK SUMMARY
  • The ATO has finalised Practice Statement PS LA 2025/2, setting out its administrative approach to granting exemptions from Public Country-by-Country reporting obligations.
  • The guidance clarifies the conditions for exemption requests, including how disclosure risks, compliance burden, and ongoing eligibility factors will be assessed.
  • The ATO has introduced a formal review process for unfavourable decisions, requiring an independent senior officer to review before a decision is finalised.
Following on from our previous alert, the Australian Taxation Office (ATO) has finalised Practice Statement PS LA 2025/2, which sets out their approach to granting exemptions from Public Country-by-Country (CBC) reporting obligations.

These rules require certain multinational groups to publicly disclose tax and financial information. 

While there are no material changes from the draft guidance, the ATO has expanded circumstances that support an exemption which may be beneficial to your business.

Taxpayers should pay particular attention to the following when considering applying for exemptions:

1. Assessing the impact of disclosure

In paragraph 39, the ATO advises that while some requests will have a low likelihood of severe consequences, consideration should still be given to these consequences particularly as it relates to the publication of sensitive information, which cannot be reversed. 

Action: When preparing an exemption request, evaluate both the likelihood and the potential impact of disclosure. Highlight any consequences that could cause significant or irreversible harm, even if they seem unlikely. Discuss these risks with your tax and legal advisors to ensure they are properly addressed in your application.

2. Intended targets of the regime 

The ATO will consider foreign currency fluctuations and whether the scale of the group was intended to be within the scope of Australia’s Public CBC reporting requirements. Australia’s regime adopts a A$1 billion annual global income threshold while other jurisdictions apply different revenue thresholds in their local currency.

Action: Determine if the group is required to prepare Public CBC reports in other jurisdictions and if it is only captured by the Australian Public CBC reporting regime due to currency movements. A combination of these factors can support an exemption. 

3. Unfavourable decisions

The guidance outlines steps the ATO must take prior to making an unfavourable decision. Notably, a senior officer (Executive Level 2 or above) who has not been involved in the case must be engaged to review the decision if any of the following apply:

  • an applicant is dissatisfied with a pending unfavourable decision
  • the issue cannot be resolved by the parties, and
  • the applicant asks for a second opinion.

Action: If you receive indications of an unfavourable outcome, request a discussion before the decision is finalised. If concerns remain unresolved, formally request review by a senior officer to strengthen your case. Once a decision is finalised, it cannot be reconsidered for that reporting period – so escalate early if needed.

How Grant Thornton can help

Grant Thornton can support your business by determining whether your group may qualify for an exemption, managing the preparation and lodgment of applications with the ATO, and providing expert advice on disclosure strategies to safeguard your reputation. Contact your Grant Thornton advisor today to discuss your eligibility.

Learn more about how our Tax services can help you
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Read our previous alert here.

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Authors
  • Keith To
    Keith To Keith is a Principal at Grant Thornton with over 15 years of professional experience advising clients specifically in relation to transfer pricing issues. View Profile
  • Jason Casas
    Jason Casas In his role as national leader of transfer pricing, Jason is responsible for all Grant Thornton Australia’s transfer pricing related services. View Profile
  • Christine Cornish
    Christine Cornish Christine Cornish is an accomplished Transfer Pricing specialist, with over 20 years of experience in professional services and inhouse tax teams. View Profile
  • Rashtin Fazal
    Rashtin Fazal Rashtin is a Partner at Grant Thornton with over 13 years of professional experience in advising clients on transfer pricing issues. View Profile

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