The Australian Taxation Office (ATO) has issued guidance for multinational groups on how to apply for an exemption from the obligation to provide some or all of the information in required tax statements known as the the local file, master file, and country-by-country report.
Australia’s filing scheme, set up in conformity with action 13 of the OECD/G20 base erosion profit shifting (BEPS) plan, is designed to give the ATO information needed to identify whether multinationals operating within its borders should be scrutinized for potential tax avoidance due to transfer pricing and other BEPS risks. The fillings will also allow Australia to meet international obligations to exchange information key to fighting MNE tax avoidance with other countries.
The guidance, issued September 26, states that any ATO decision permitting an exemption from Australia’s local file, master file, and country-by-country filing requirements will be based on all the relevant facts.
The guidance further states that an Australia country-by-country reporting exemption and master file exemption will be considered in cases where the global parent entity is a resident for tax purposes in a jurisdiction that has not yet implemented country-by-country reporting.
An MNE is unlikely to be granted an exemption if, after the first year of reporting, the jurisdiction of the global parent entity has still not made an official pronouncement to implement country-by-country reporting, though, the tax agency said.
Other factors that may play a role in the decision to grant relief or not include whether the global parent has been granted an exemption from reporting it its home country, whether Australia needs the information to meet obligations to automatically exchange a country-by-country report, and whether the entity is under audit in Australia and/or has no or low international related party dealings.
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