Detailed instructions outlining the disclosure requirements of the local file for specific years are published annually on the CBC reporting web page.
Entities falling outside of a tax consolidated group or MEC group
If you are a CBC reporting entity, but not a member of an Australian tax consolidated group or MEC group made up of other members of your CBC reporting group, your obligation to lodge a CBC report or master file may be satisfied by another member of your CBC reporting group.
For example, in these circumstances, the head company of the tax consolidated group or MEC group may notify us that it is lodging its CBC report and master file also on your behalf when it lodges its local file.
However, in these circumstances, you will still have an obligation to lodge a local file. This obligation cannot be met by the head company of the tax consolidated group or MEC group.
Interaction with ACAs and APAs
Irrespective of whether an annual compliance arrangement (ACA) or advance pricing arrangement (APA) is in place, IRPD transactions will need to be disclosed in the local file unless the requirements for providing only the short form local file are met.
Financial accounts
If the highest quality relevant financial accounts for the reporting entity have already been provided under another arrangement (such as an ACA), you don't need to provide them again.
If there is no single set of accounts prepared for a MEC group, it is acceptable to provide more than one set of accounts in Part B of the local file, which are the highest quality relevant accounts.
Offshore branches
An Australian resident entity includes in its local file details about transactions that are:
- ‘international related party dealings’ (IRPDs) as defined in the IDS instructions
- between an entity's offshore branch and a subsidiary incorporated in that jurisdiction or any other non-Australian jurisdiction.
The term IRPD only covers dealings or relations between different persons or entities and does not include a 'dealing' or commercial or financial relations with your own branch operations. Accordingly, attributing the revenue or expenditure of an Australian resident entity to its own offshore branch operations is not an IRPD as defined in the IDS as it does not involve commercial or financial dealings with another entity. CBC reporting entities should not include these amounts in their local file.
Business restructures
The ‘Reporting entity description’ section of the local file needs to include ‘a description of any business restructures affecting the reporting entity in the current or previous income year, and an explanation of its significance'.
Accordingly, the reporting entity should describe the restructuring events that would be disclosed in, for example Question 17 of the IDS. The reporting entity should also describe other restructuring events that materially impact on the Australian tax position. For example:
- any cessation of previously material operations or activities, including operations carried on at or through an offshore permanent establishment
- any change in the organisational or ownership structure affecting entities that had or may have material assets or operations
- any intragroup or related party dealings in intangible rights or assets or material assets or operations.