Australia: Draft legislation requiring disclosure of subsidiaries' tax residence in financial reports

Under the draft legislation, Australian public companies must disclose information on their subsidiaries, including details on tax residence

Draft legislation requiring disclosure of subsidiaries' tax residence in financial reports

Article Posted date 21 March 2023

The government on 16 March 2023 released the first tranche of draft legislation requiring Australian public companies (listed and unlisted, but not corporate collective investment vehicles) to disclose information on their subsidiaries, including details on tax residence, in their financial reports—effective for financial years commencing 1 July 2023.

The proposed measures complement the government’s commitment to implementing a public beneficial ownership register as part of its multinational tax integrity package which applies to a broader range of covered entities.

Under the draft legislation, Australian public companies must, as part of their annual financial reporting obligations, provide a “consolidated entity statement” that provides the following information in relation to entities within the consolidated entity:

  • Name of each entity at the end of the financial year
  • Whether the entity was a body corporate, partnership or trust at the end of the financial year
  • Whether at the end of the financial year, the entity was any of the following:
    • Trustee of a trust within the consolidated entity
    • Partner in a partnership within the consolidated entity
    • Participant in a joint venture within the consolidated entity
  • If the entity was a body corporate, where the entity was incorporated or formed
  • If the entity is a body corporate, the public company’s percentage ownership of each of such entity at the end of the financial year
  • Tax residence of each entity during the financial year

 

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