New requirements for the consolidated entity disclosure statement of public companies

Public companies reporting for financial years beginning on or after 1 July 2024 (i.e. year-ends on or after 30 June 2025) should be aware of changes to some of the information required in the consolidated entity disclosure statement (CEDS). The Treasury Laws Amendment (Fairer for Families and Farmers and Other Measures) Act 2024 received Royal Assent on 10 December 2024 and corrects an anomaly in the CEDS tax residency disclosures contained in section 295(3A)(vi) and (vii).

Last year’s CEDS

The CEDS for your last financial year (which commenced before 1 July 2024) required disclosure of whether each group entity was an ‘Australian resident’ or ‘foreign resident’ according to the definitions in the Income Tax Assessment Act 1997 (ITAA 1997).These definitions are mutually exclusive. Therefore, an Australian resident under the ITAA 1997 could not also be disclosed as a foreign resident, instead showing any foreign tax residencies as a footnote.

What’s changed for 30 June 2025 and later years?

For financial years beginning on or after 1 July 2024 (i.e. 30 June 2025 year-ends onwards), the CEDS must:

State whether each entity is an Australian resident (based on a new definition of ‘Australian resident’ contained in s295(3B) that includes certain trusts and partnerships)
Include a list of each foreign jurisdiction in which the entity was a tax resident for the purpose of the tax law of the foreign jurisdiction.

Name of entity Note 1	Type of entity	Trustee, partner or participant in joint venture Note 2	% of share capital held	Country of incorporation	Australian resident	Foreign jurisdiction(s) in which the entity is a resident for tax purposes (according to the law of the foreign jurisdiction)
Public Company Limited	Body Corporate	-	N/A	Australia	Yes	N/A
Sub 1 Pty Ltd	Body Corporate	-	100	Australia	Yes	New Zealand
Sub 2 Unit Trust	Trust	-	N/A	Australia	Yes	N/A
Sub 3 Pty Ltd	Body Corporate	Trustee	60	Switzerland	No	United States of America
Sub 4 Pty Ltd	Body Corporate	-	100	Bermuda	No	N/A
Public Company Share Trust	Trust	-	N/A	Australia	Yes	N/A
XYZ Partnership	Partnership	-	N/A	N/A	Yes	N/A

Note 1: Entities listed here are those that are part of the consolidated entity at the end of the financial year. Entities disposed of during the year, or where the entity has lost control by the reporting date, are not included here. This means that entities listed could be different to the ‘Interests in subsidiaries’ note contained in the notes to the financial statements.

Note 2: This means whether, at that time, the entity was a trustee of a trust within the consolidated entity, a partner in a partnership within the consolidated entity, or a participant in a joint venture within the consolidated entity.

Basis of preparation

Entities should also include a ‘Basis of preparation’ note explaining how tax residencies have been determined. Below is an example for 30 June 2025 and later financial years.

Basis of Preparation (for financial years beginning on or after 1 July 2024)

This Consolidated Entity Disclosure Statement (CEDS) has been prepared in accordance with the Corporations Act 2001, reflecting the amendments to section 295(3A)(vi) and (vii) which clarify the definition of foreign resident as being an entity that is treated as a resident of a foreign country under the tax laws of that foreign country. These amendments apply to financial years beginning on or after 1 July 2024. The CEDS includes certain information for each entity that was part of the consolidated entity at the end of the financial year in accordance with AASB 10 Consolidated Financial Statements.

Determination of Tax Residency

Section 295(3B)(a) of the Corporation Acts 2001 defines an Australian resident as having the meaning in the Income Tax Assessment Act 1997. The determination of tax residency involves judgement as there are currently several different interpretations that could be adopted, and which could give rise to a different conclusion on residency. Section 295 (3A)(a)(vii) requires the determination of tax residency in a foreign jurisdiction to be based on the law of the foreign jurisdiction relating to foreign income tax.

In determining tax residency, the consolidated entity has applied the following interpretations:

Australian tax residency

The consolidated entity has applied current legislation and judicial precedent, including having regard to the Tax Commissioner's public guidance in Tax Ruling TR 2018/5.

Foreign tax residency

Where necessary, the consolidated entity has used independent tax advisers in foreign jurisdictions to assist in determining tax residency in those foreign jurisdictions and ensure compliance with applicable foreign tax legislation.

Partnerships and Trusts

Section 295(3B)(b) and (c) of the Corporation Acts 2001 have been introduced to clarify that an Australian resident for the purposes of these disclosures includes a partnership with at least one member of which is an Australian resident within the meaning of the Income Tax Assessment Act 1997 and a resident trust estate under the meaning in Division 6 of the Income Tax Assessment Act 1936. For the purposes of the CEDS, Public Company Share Trust is determined to be an Australian resident trust estate within the meaning of Division 6 of Part III of the Income Tax Assessment Act 1936. XYZ Partnership is also determined to be an Australian resident because one of its partners is an Australian tax resident.

More information

Our article contains further information on these amendments.

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