On 6th April 2023 the Australian Treasury released an exposure draft of its Public Country-by-Country Reporting (CbCR) regime which they announced in their October 2022 budget. A few provisions, or lack thereof, have caused consternation for businesses globally.

KPMG professionals in Australia provided their initial analysis of the draft legislation (PDF 273 KB) and have since provided a response to the Australian Treasury consultation (which closed 28th April 2023) which can be accessed here. (PDF 254 KB)

It is unknown at this stage whether changes will be made to the Australian tax transparency proposals following consultation, however, it is critical to appreciate that if enacted in its current form, these are still likely to be the most comprehensive public CbCR regime businesses will report under, from as early as 1 July 2023. It is important that Heads of Tax in conjunction with key internal stakeholders now begin considering the steps that need to be taken to be comfortable publicly publishing their CbCR data, both from a data integrity perspective and from a comprehensibility perspective. Given that the requirement to publish the group’s approach to tax is something the Australian public CbCR rules are unlikely to change, being able to articulate this, in conjunction with explaining the CbCR data in a way which is clear to someone who is not a tax expert, should be at the top of the agenda.

Understanding the points which remain uncertain or represent the largest divergences between Australian public CbCR and existing mandatory or voluntary CbCR rules is also important. This is particularly important for those with 30 June year ends, who may find the first reportable period starting in less than two months and need to begin preparations now.

Six key takeaways from the Australian public CbCR proposals

1. Multiple relevant standards

The current proposals take inspiration from GRI 207: Tax 2019, OECD Public CbCR and BEPS Pillar 2 and advise users to follow guidance for all these regimes “to the extent they are relevant”. This mix and match approach could lead to differing approaches being taken, making it challenging for groups to achieve consistency in their own disclosures or satisfy both EU Public CbCR and Australian CbCR simultaneously.

2. New data points

New data points which are not required by GRI 207, OECD private CbCR or EU public CbCR can be difficult to collect and validate for complex groups. The policy rationale is currently unclear what additional insights would be gained particularly given the significant compliance costs involved in collecting these additional data points. These are:

  • “Expenses from transactions with related parties that are not tax residents of the jurisdiction”
  • “A list of tangible and intangible assets as at the end of the income year”

In particular the list of intangible assets is likely to be problematic as groups will likely be subject to multiple accounting regimes which recognize intangible assets on different basis or may have intangibles which are only recognized upon consolidation.

 3. Effective Tax Rate based on full BEPS Pillar 2 calculations

Perhaps the item causing most concern is the requirement to report the Effective Tax Rate (ETR) per the calculations performed in accordance with the BEPS Pillar Two model rules. This presents three main challenges:

  • The Australian CbCR rules would require the ETR to be published 6 months before the first Pillar 2 calculation (the GloBE information return) is due, with subsequent annual publications preceding the returns by 3 months.
  • The ETR published would not take into account any top-up taxes paid under Pillar 2 or any qualifying domestic top up tax. In addition, the Pillar 2 ETR is not calculated on the same basis as the accounting ETR and so has the potential to create confusion and fuel inconsistent comparisons.
  • Where a group could avail of the Pillar 2 temporary CbCR transitional safe harbour rules (and perform less complex calculations), it does not appear that they could do so under the proposed Australian CbCR rules as they are currently written.

The KPMG Australia consultation (PDF 254 KB) response to the Australian Treasury discusses these and further ETR challenges in more detail.

4. Disclosure of confidential information

Both GRI 207 and the EU public CbCR directive give the option for groups to temporarily omit reporting some information if certain, specific, conditions are met around legal prohibitions or commercially sensitive information. While, in practice these are likely to be used in very limited circumstances, there will be instances where it is legitimate to do so. The proposed Australian rules make no such allowance.

5. No de minimus Australian presence

If a group has any Australian presence, through any entity (a direct reading of the legislation could include dormant entities) or permanent establishments the whole group will be in scope of public CbCR.

6. Reporting obligations on a non-resident

There are concerns around the practicality of imposing the obligation to report CbCR data on the ultimate parent company of a multinational group, whether it is foreign or Australian headquartered. It is unclear how it would publish the information to the Commissioner where it does not have an Australian presence itself for tax purposes. Similar issues arise on how penalties and recovery actions might apply to a foreign resident CbC parent entity


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Becky Knight
Global Tax Policy,
KPMG International


Tim Keeling
International Tax,
KPMG Australia


Alia Lum
Partner, Tax Policy &
Regulatory Engagement Lead,
KPMG in Australia


Phil Beswick
Partner, Tax Governance
& Transformation,
KPMG Australia


Jenny Wong
KPMG Australia


Damien Williams
Tax Manager,
KPMG in Canada