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

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While there are no material changes from the draft guidance, the ATO has expanded circumstances that support an exemption which may be beneficial to your business.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

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