Australia’s Public CbC reporting regime, enacted on 10 December 2024, requires certain large multinational enterprises to publicly disclose tax and economic data on a country-by-country or aggregated basis. The disclosures are to be submitted to the ATO in a prescribed XML format, with the ATO publishing the information on data.gov.au.
What you need to know
Companies subject to Australia’s Public CbC reporting regime should review the ATO’s guide and ensure their internal processes and systems are structured to comply with the new requirements. This includes:
- Understanding the detailed calculation and inclusion/exclusion rules for each disclosure item
- Assessing eligibility for exemptions and establishing procedures to identify and document any exemptions granted by the Commissioner for specific line items
- Ensuring reporting systems are set up to comply with the new requirements as any errors or missing required disclosures will prevent successful submission
- Engaging with your stakeholders to ensure readiness for timely, accurate, and compliant reporting under the new regime.
Reporting requirements
The ATO guidance provides significant benefits to companies by offering instructions on how each disclosure item should be calculated and what should be included or excluded in the Public CbC report. It specifies for each line item – such as revenue, book value of tangible assets, tax paid and employee numbers – the definitions and calculation methods.
The following definitions clarify how key disclosure items should be interpreted and reported:
- Unrelated and related parties revenue: Includes revenue from sales of inventory and property, services, royalties, interest, premiums, and other amounts. However, it excludes payments received from other members of the CbC reporting group that are treated as dividends in the payer’s tax jurisdiction.
- Book value of tangible assets: Tangible assets exclude cash or cash equivalents, intangibles, and financial assets.
- Taxes paid: Includes cash taxes paid by a member to both its resident jurisdiction and other tax jurisdictions, as well as withholding taxes paid by other entities
- Employee numbers: Report full-time equivalent employees as at year-end. Independent contractors involved in the entity’s ordinary operations may be included as employees.
This clarity reduces ambiguity and the risk of inconsistent or non-compliant reporting, helping companies align their disclosures with both legislative intent and international standards like GRI 207. As a result, companies can prepare accurate, comparable, and transparent disclosures.
Approach to tax
In line with international standards such as GRI 207, entities are expected to include a clear and comprehensive statement outlining their approach to tax. This may encompass the organisation’s tax governance framework, principles guiding tax planning and compliance, methods for identifying and managing tax risks, and the nature of engagement with tax authorities.
Where relevant, companies may also reference their tax strategy to demonstrate their commitment to regulatory compliance across jurisdictions in which CbC reporting group members operate.
Exemptions
The structure of the Public CbC reporting requirement is designed to accommodate the possibility that the ATO may grant exemptions from specific disclosure line items, but it still requires companies to explicitly state, for each individual line item, whether such an exemption has been granted by the Commissioner.
This is operationalised through mandatory ‘exemption indicators’ for every reportable element, where the reporting entity must declare ‘True’ (exempt) or ‘False’ (not exempt) for each disclosure. If an exemption is indicated, the company is not required to provide the underlying data for that item. This approach ensures transparency and accountability, as it allows both the ATO and the public to clearly see which disclosures have been exempted and which have been reported, maintaining the integrity of the reporting process while respecting granted exemptions.
Validation and lodgement
The validation process for Public CbC disclosures is highly structured to ensure both completeness and accuracy. Companies must prepare their reports in XML format, strictly following the ATO’s schema and detailed instructions for each disclosure item.
The ATO first checks that the file is properly formed and that all required data elements are present and correctly formatted according to the schema’s specifications, which includes verifying data types. If any required disclosures are missing, incorrectly formatted, or if the file structure does not conform to the schema, the file will fail validation and cannot be lodged.
Only files that pass all validation checks will be accepted for lodgement, ensuring that all submitted reports are consistent, complete, and compliant with the ATO’s requirements.
Next steps
Australia’s Public CbC reporting regime represents a significant shift toward greater tax transparency and accountability for large multinational enterprises. With the ATO’s implementation guide now in effect, impacted entities must take proactive steps to understand the reporting obligations, align internal systems, and ensure accurate and compliant disclosures. Please get in touch to explore how we can support your organisation in navigating this complex reporting landscape.
Public Country-by-Country (CbC) Reporting Regime
