While these instructions are not a guide to income tax law, you can use them to help you complete your local file when meeting this part of your country-by-country (CBC) reporting obligations.
These instructions apply to the local file for 2020. This relates to reporting periods starting on or after 1 January 2019.
The local file must be electronically lodged in the approved form (an XML file generated in accordance with an ATO developed XML schema). The local file is part of a combined form, which also contains the master file. The local file may be lodged separately or together with the master file.
The local file can only be lodged electronically, through one of the following:
- Online services for business using file transfer
- Online services for agents using file transfer
- Standard Business ReportingExternal Link (SBR) using SBR-enabled software.
Lodgments via email or paper are not accepted.
The information requirements (high level design) and associated specifications (detailed design) for the local file are contained in the Local file/master file 2020. Reference to specific form elements is made via element IDs in the form of 'LCMSFXXX'.
The local file collects information and relevant documentation for international related party dealings (IRPDs). The local file is comprised of three parts:
- Short form
- Part A
- Part B.
A general design feature of the local file is the requirement to show values in Part A and provide agreements in Part B for individual IRP transactions, unless the transaction is covered by:
- one of the eight categories on the exclusions list
- an agreement which is in a relevant agreement series (RAS).
These are the consequences of an IRP transaction being covered by an agreement which is in a RAS:
- The values required to be shown in Part A of the local file for each kind of transaction category covered by the RAS are aggregated for all the transactions covered by agreements in the same RAS.
- The criteria in the exclusions list are applied on the basis of these aggregated values.
- In Part B of the local file, agreement documentation only needs to be provided for a material representative agreement in the RAS that was current during the income year.
Where a reporting entity enters into a transaction with multiple IRP non-resident counterparties, they must complete Part A of the local file for each IRP non-resident counterparty to the transaction.
Additionally, the local file has been designed so that, unless a transaction is on the exclusions list, the values shown in Part A of the local file for a particular transaction are linked with an agreement provided in Part B or an agreement previously provided to the ATO, if an agreement exists.
If a single agreement covers more than one kind of transaction category, each of the transactions shown in Part A will need to be linked to the same agreement in Part B of the local file.
If you have feedback or questions regarding these instructions, contact us at CBCReporting@ato.gov.au
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