What we focus on
We focus on significant global entities (SGEs) and country-by-country (CBC) reporting entities that:
- meet the definition but do not identify as such on their tax returns, and
- fail to complete and lodge relevant returns and reports as required.
Entities should check their status each income year to ensure they correctly self-assess their SGE and CBC reporting entity status, and any reporting obligations are met when due.
Significant global entity
Certain measures only apply to entities that meet the definition of a significant global entity. Subdivision 960-U of ITAA 1997 defines an SGE as a global parent entity or member of that global parent entity’s group with annual global income of $1 billion or more. The SGE concept is not limited to entities that are members of a multinational group. An SGE can also be an entity in a group that only operates in Australia and from 1 July 2019, includes groups headed by individuals, trusts, partnerships, and private companies.
SGEs may be subject to increased penalties and the following integrity measures:
- multinational anti-avoidance law (MAAL), and
- diverted profits tax (DPT).
Country-by-country reporting entity
If an entity is an SGE, it needs to determine whether it may also be a country-by-country reporting entity. Subdivision 815-E of ITAA 1997 defines an entity as a CBC reporting entity if it is a CBC reporting parent or is a member of a CBC reporting group that includes a CBC reporting parent. When working out the annual global income of a CBC reporting parent under the notional listed company group rules, specific consideration must be given to the rules that modify the accounting standards for the purposes of determining an entity's CBC reporting entity status. These are distinct from the rules that modify the accounting standards for the purposes of determining an entity's SGE status. For more information see Country-by-country reporting entities.
All SGEs are subject to increased penalties and integrity measures, however, CBC reporting entities have additional reporting requirements and may be required to produce and report the following:
- CBC reporting statements, and
- general purpose financial statements (GPFS) if they are a corporate tax entity.