CBC reporting obligations

You will have CBC reporting obligations for an income year if:

• you (including a trust or partnership) were a CBC reporting entity for the whole or a part of the previous income year
• during the income year, you were an Australian resident entity or a foreign entity with a permanent establishment (PE) in Australia
• you are not exempt from providing any CBC reporting statements.

If you are a foreign partnership or foreign hybrid treated as a partnership conducting activities through a permanent establishment in Australia, you have CBC reporting obligations if you were a CBC reporting entity in the preceding year.

You will be a CBC reporting entity for an income year if you are any of the following:

• a CBC reporting parent
• a member of a group of entities consolidated for accounting purposes where another entity of the group is a CBC reporting parent
• a member of a notional listed company group where another entity of the group is a CBC reporting parent.

You will meet your CBC reporting obligations if you lodge your statements within 12 months after the end of the income year to which the statements relate.

If the due date for lodgment falls on a day that is not a business day, you can lodge on the next business day.

SAP transitional period – less or greater than 12 months

An 'income year' for CBC reporting purposes must be a 12-month period. Generally, if you have a transitional period that is less or greater than 12 months because we have approved a substituted accounting period (SAP) and changed your income tax accounting period, the SAP transitional period is not an income year. This is because the SAP transitional period is not a 12-month period.

A SAP transitional period of less than 12 months can arise, for example where we have approved a SAP from a year ending 30 June 2022 to a year ending 31 December 2022. This results in a SAP transitional period of 6 months.

A SAP transitional period of greater than 12 months can also arise, for example where we have approved a change for an 'early balancer' with a year ending 31 December 2020 to a year ending 31 March 2022. This results in a SAP transitional period of 15 months. SAP transitional periods of different lengths can also apply depending on your new SAP balance date that is adopted (see Law Administration Practice Statement PS LA 2007/21).

As a SAP transitional period is not a 12-month period, it is not considered to be an income year under Subdivision 815-E for CBC reporting purposes. Subdivision 815-E will not require CBC reporting for the SAP transitional period.

However in the interests of transparency, and consistent with OECD guidanceThis link will download a file, we request that you still lodge your CBC report, master file and local file for the SAP transitional period.

Your CBC reporting entity status before a SAP transitional period is relevant in determining future CBC reporting obligations. If you were a CBC reporting entity for the income year prior to your SAP transitional period, then you will have CBC reporting obligations for your new substituted accounting period. These CBC reporting statements must be lodged within 12 months after the end of your new substituted accounting period.

Newly created entity with a SAP – first income year

If you are a newly created entity and you are granted a SAP for your first tax return, the first period is an income year.

A newly created entity will not have CBC reporting obligations for the year it comes into existence. It will not have been a CBC reporting entity in the preceding income year as it did not exist in the preceding year.

New permanent establishment

A foreign entity will have CBC reporting obligations for the income year in which it first operated at or through a permanent establishment in Australia if the foreign entity was a CBC reporting entity for the whole or part of the preceding income year.

Accounting and tax consolidated groups

If you are a member of a group of entities consolidated for accounting purposes and more than one member of the group has a CBC reporting obligation for the income year, you or another member of the group may file the CBC report and master file on behalf of all the members of that group. However, each entity required to lodge a tax return is required to individually file a local file.

A head company of a tax consolidated group or multiple entry consolidated (MEC) group filing a local file will need to include all the required subsidiary member information for the relevant periods of their membership of the tax consolidated group or MEC group during the income year. If you lodge the local file as the head company of a tax consolidated group or MEC group, you will meet the obligations of your subsidiary members for the period of their membership of the group. Similarly, if you lodge a master file or CBC report as the head company of a tax consolidated group or MEC group, you will meet the obligations of your subsidiary members for the period of their membership of the group.

If you join or leave a tax consolidated group or MEC group during an income year, you may have an obligation to lodge a tax return for any period that you were not a member of that group or another group. This is sometimes called a 'stub return'. While the tax return will only reflect matters relevant to the period that you were not a subsidiary member of any tax consolidated group or MEC group, it is nevertheless a tax return for the income year in which the period occurred. If you were a CBC reporting entity for the whole or a part of the previous income year, you must lodge a local file, master file and CBC report for the current income year. The local file needs to include information in relation to you for the period that you were not a subsidiary member of any tax consolidated group or MEC group.

Takeovers, mergers, demergers and other restructures

A restructure during an income year of a group consolidated for accounting purposes may present difficulties in preparing or obtaining a CBC report or master file. The OECD has published guidance on the effect of some restructures on the filing and content of CBC reports – see (section VI) of Guidance on the implementation of country-by-country reportingExternal Link. If you have had a restructure during a CBC reporting year that is like a scenario described in the OECD guidance, you may look to the principles described in that OECD guidance in determining your obligation to file a CBC report. You may take the same approach in determining any obligation to file a master file and if so, the scope of the group reflected in the master file.

To supplement the OECD guidance, we provide the following advice on some specific scenarios.

If you have CBC reporting obligations because of your membership of a consolidated accounting group in the preceding year, but you left that group during the CBC reporting year due to demerger or being acquired by new owners, we recognise that the former group may not provide access to a CBC report, a master file or the information required to prepare such statements. Our approach to this situation depends on whether you continue to have CBC reporting entity status after leaving the former group.

If you will continue to have CBC reporting entity status after leaving the former group, we will accept that any obligation you have to lodge a CBC report or master file may be satisfied by you (or another entity on your behalf) lodging a CBC report and master file reflecting the new group that includes you.

If you will not be a CBC reporting entity after the restructure we will, on request, provide an exemption from lodging a CBC report or master file. See the section on exemptions.

Local file obligations are generally not affected by restructures. An entity that was a CBC reporting entity in the prior year will have an obligation to lodge a local file for the reporting year. The content of the local file will reflect the nature of transactions during the income year including whether other parties were related parties at the relevant time.

If you are in doubt or are having difficulties, email us at CBCreporting@ato.gov.auOpens in a new window