Australia: ATO Explains Exemptions from Country-by-Country Reporting Obligations

On 27 September 2016, the Australian Taxation Office (ATO) published a guidance on granting exemptions from the country-by-country (CbC) reporting obligations. The guidance explains how a taxpayer that is considered a significant global entity (SGE) and that is subject to the CbC reporting obligations in Australia may request an exemption from filing one or several required reports from the ATO. The exemption, if granted, will generally be valid for one to three reporting periods. 

The Australia CbC reporting rules require SGE taxpayers or members of SGE groups to file the local file, the master file and the CbC report with the ATO. However, if the ATO receives the CbC report within a reasonable time from the global entity's tax authority, the local taxpayer will not have an obligation to file the CbC report.

The guidance also states that in considering an exemption application, no single factor will be determinative, but the ATO will take into account, inter alia:

• whether the taxpayer is currently subject to a tax audit;
• whether the taxpayer has any international related-party dealings and the nature of those dealings; and
• whether the taxpayer transacts with entities resident in high-risk jurisdictions.