Obligations placed on both overseas and Australian headquartered multinationals: Recent developments in Australia’s Public Country-by-Country Reporting (CbCR) regime

The journey so far

As part of the Australian Government's ongoing commitment to increased tax transparency, Australia’s Public Country-by-Country Reporting (Public CbCR) regime is now being implemented.

The regime places a lodgement obligation on both overseas and Australian headquartered multinationals who have an Australian presence and more than AUD $10 million (approximately USD $6.5 million/€5.5 million) of Australian sourced revenue. While the regime applies to all multinational entities who meet the criteria, the process by which it has been implemented is uncommon in terms of its direct application of an Australian compliance obligation to overseas headquartered multinationals.

Importantly, impacted multinationals both in Australia and overseas need to be aware of and act on their obligations to avoid extremely high administrative penalties for non-compliance of up to AUD $825,000 (approximately USD $535,000/€460,000) per lodgement.

The regime commences for reporting periods starting on or after 1 July 2024. All reports are due within 12 months of the reporting period's end. Therefore, the first affected group of companies will be those with a 30 June year-end.

The Australian Taxation Office (ATO) issued initial guidance on 11 December 2024 and continues to roll out materials and processes as the implementation phase continues. For BDO’s insights on the updates, please refer to previous articles here and here.

What’s new: The ATO’s recent Public CbCR releases

Registration form and instructions

On 12 June 2025, the ATO issued instructions to register for Public CbCR along with the relevant form. The registration form is to be submitted via email and covers several sections including the opportunity to nominate an authorised contact in Australia - this could be the public officer of a local subsidiary or its adviser.

Registration should streamline interactions with the ATO, including:

Submitting the Public CbC report
Requesting extensions for report submission
Applying for exemptions from reporting obligations.

A registering entity can also nominate an authorised tax agent to engage with the ATO on their behalf.

Practice Statement Law Administration 2025/D1 - Public Country by Country Reporting Exemptions

While the aim of the Public CbCR regime is tax transparency, given the significant penalties for non-compliance, affected entities may consider seeking exemptions where appropriate. The Commissioner has the discretion to grant full or partial exemptions for a single reporting period.

To facilitate exemptions, on 3 July 2025, the ATO issued draft Practice Statement Law Administration 2025/D1 (PSLA 2025/D1) which contains guidance for ATO staff on exercising exemption discretion, detailing how the exemption process will be administered and the information required from affected multinationals. This draft is open for public consultation until 5 September 2025.

Based on the draft PSLA, exemptions will only be granted in exceptional circumstances such as:

National security: Potential compromise of Australia's defence, intelligence, international relations, or law enforcement interests
Legal conflict: Breach of Australian or foreign law, however noting that foreign laws intended to subvert the Public CbCR regime weaken the case
Commercial sensitivity: Disclosure leading to harm to the business that exceeds the Parliament's pre-determined considerations for the regime, requiring clear evidence of commercial consequences.

Additionally, government related entities and entities not meeting Public CbCR reporting thresholds in their parent entity jurisdictions may also be exempt. The guidance provides examples of the above exemption scenarios.

Exemption decisions, once made by the ATO, are final unless they are successfully appealed via the Federal Court. Therefore, it is critical that care is taken in preparing an exemption request and the information required to support it. Should an annual exemption be required, a successful application can be ‘rolled forward’ for up to two subsequent years providing that there are no changes to the underlying facts.

To apply for either a full or partial exemption, affected entities can submit their completed application to the ATO in writing. Given that the PSLA is currently in draft, consideration should be given by impacted multinationals as to whether it would be preferable to wait for the draft PSLA to be finalised before registering and making an exemption application. As the draft PSLA is subject to a consultation process which may influence, or widen, the factors to consider and/or examples provided as guidance, waiting for it to be finalised will likely be preferable.

What to expect next from the ATO

The final PSLA will be published by the ATO upon conclusion of the consultation process, which is therefore unlikely to be before October 2025. Instructions for the approved lodgement form are underway and are also anticipated later this year.

The reported Public CbCR information will be published on the Australian Government website with the initial publication slated for late 2026.

Public CbCR preparedness: Key steps for multinationals

With the first Public CbCR reporting period approaching, it is crucial for affected entities to accelerate their preparations. Based on a multinational’s geographical profile, Australia may not be the only impacted jurisdiction, given that Public CbCR implementation has already commenced in several jurisdictions. Therefore, these actions may require coordination across multiple jurisdictions and implementation timeframes:

Awareness and allocation of responsibilities: Once affected non-Australian headquartered multinationals are aware of their obligations, actions must be taken to allocate responsibility for compliance to the appropriate personnel within the organisation.

Perform a gap analysis: Affected entities are likely to operate in multiple jurisdictions that may have implemented (or be in the process of implementing) similar or different interpretations of the Public CbCR rules. For example, the Australian requirements call for additional disclosures compared with the Organisation for Economic Co-operation and Development (OECD) template (as outlined in Global Reporting Initiative 207 and related guidance). Entities should consider a gap analysis to pinpoint areas where jurisdictional differences (such as those in Australia) may impact the effectiveness of a centralised approach.
Initiate readiness and data collection: Affected entities should immediately begin collecting the necessary financial and tax information and conduct a thorough readiness assessment for Australian Public CbCR compliance.
Approach exemptions strategically: While the ATO's draft exemption guidance offers insights, it clearly indicates that exemptions will only be granted in exceptional circumstances as the information requirements are intentional. Simply claiming the preparation is ‘onerous’ or citing an exemption granted by another country will not suffice. Strong, evidence-based justifications aligned with the specified grounds are essential for any exemption application. Begin gathering this crucial evidence now if you plan to apply.
One application per year: Other than appealing to the Federal Court - which would be a protracted and costly exercise - there is no objection or review process once the ATO makes a decision. Therefore, careful consideration is required to ensure the request and supporting information is sufficient.
Appoint authorised tax agents: As part of the registration process, to ensure no compliance requirements are missed, affected entities should nominate trusted advisers as authorised tax agents to act on their behalf with the ATO.
Understand penalties: Be aware that non-compliance carries significant financial risks. Public CbCR entities face administrative penalties of up to AUD $825,000 for failing to publish the required information by the due date. It remains unclear as to how penalties may be applied where the Public CbC Reporting Entity on which the obligation is based, is based outside of Australia.

How BDO can help

Multinational groups should perform an assessment of their Public CbCR requirements in Australia. If you need support, our transfer pricing experts can help affected entities by facilitating the registration process, and can also evaluate the relevant exemption eligibility and supporting evidence to be submitted to the ATO. Contact your local BDO transfer pricing advisers today.