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ATO Releases Draft Guidance on New Public CbC Reporting Exemption Requirements


Public Country-by-Country Reporting Exemptions
Public Country-by-Country Reporting Exemptions

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The Australian Taxation Office (ATO) has recently released Draft Practice Statement Law Administration PS LA 2025/D1, which provides guidance on the exemption application requirements for the upcoming public Country-by-Country (CbC) reporting regime. This regime will be effective for reporting periods beginning on or after July 1, 2024, applying to eligible multinational enterprise (MNE) groups.


The draft guidance details the circumstances under which an exemption can be granted, the application process, and the key factors the ATO will consider when evaluating an exemption request.


What is Public Country-by-Country (CbC) Reporting？

To enhance tax transparency for multinational enterprises, Public CbC Reporting requires specific large MNE groups to publicly disclose key financial and tax information on a global basis for public scrutiny.


Scope of Application

This requirement applies to MNE groups that meet both of the following two conditions:


  • Global consolidated revenue of at least AUD$1 billion, and

  • Australian-sourced income of at least AUD$10 million.


Guidance on Public CbC Reporting Exemptions

According to the ATO's draft guidance, an entity may apply for an exemption from its Public CbC Reporting obligations under specific circumstances. The ATO provides for two types of exemptions:


  • Full Exemption: An exemption from all Public CbC Reporting obligations for a specific reporting period, meaning no relevant information is required to be disclosed.

  • Partial Exemption: An exemption from the disclosure of certain information or for specific jurisdictions within a reporting period. For example, an exemption might only apply to data for certain countries or particular financial metrics.


Criteria for Granting Exemptions

Exemptions are not automatic; an entity must apply and will only be considered for approval under the following exceptional circumstances:


  • National security concerns

  • Legal or regulatory conflicts (e.g., disclosure would violate local laws)

  • Genuine commercial sensitivity issues, where public disclosure could have a significant negative impact on the entity's competitiveness or market position.


The ATO will evaluate each exemption request on a case-by-case basis, ensuring that the protection of a business's legitimate interests does not compromise the overall goal of transparency.


How to Apply for a Public CbC Reporting Exemption

Eligible entities wishing to obtain an exemption must submit a formal written application to the ATO with sufficient grounds and supporting documentation.


Application requirements include:


  • A clear statement of the reasons for the exemption.

  • Relevant evidence and supporting documents.

  • Application per reporting period: A separate application must be submitted for each reporting period.

  • Case-by-case review: The ATO will review each application individually and will not grant automatic approval.


Regarding exemption validity:


  • An exemption is only valid for one reporting period.

  • If the circumstances persist, the entity must re-apply in subsequent reporting periods, and the ATO will independently re-evaluate whether the exemption criteria are met.


Conclusion

The ATO's draft guidance on Public CbC Reporting exemptions balances the push for tax transparency with a channel for businesses to apply for relief in specific and justifiable situations.


Multinational enterprise groups affected by the new reporting regime should:


  • Timely review their global business structure and information disclosure obligations.

  • Assess whether there are grounds for a justifiable exemption application.

  • Prepare detailed application materials and supporting documentation.

  • Consider early engagement with the ATO to clarify applicability and regulatory expectations.


Proactively addressing these new rules and allowing for adequate time to prepare for compliance will help companies mitigate disclosure risks, protect commercial sensitivities, and ensure stable compliance.


Source:

  • ATO Draft Guidance on Public CBC Reporting Exemptions, Pwc Australia website.

  • PS LA 2025/D1 | Legal database, ATO website.

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