In brief
The Australian Taxation Office (ATO) has recently released draft guidance on the Australian Public Country by Country (CBC) report, including draft instructions on how to prepare Public CBC reports and the XML Schema for the file.
The Public CBC reporting regime, commencing for reporting periods starting on or after 1 July 2024, requires certain large groups to publicly disclose selected tax and financial information for Australia, specified countries, and the rest of their global operations. Whilst consultation on the draft guidance remains open until Friday 28 November 2025, the draft guidance provides practical insights for those working to prepare their first Australian Public CBC report.
In detail
The recent guidance follows that issued previously by the ATO in relation to registering for the regime (see prior Tax Alert here) and exemptions from the Public CBC reporting regime (as discussed in our Tax Alert linked here). The draft lodgment instructions are relevant for all entities falling within the scope of the regime.
The ATO’s exemption guidance remains in draft (expected to be finalised in November 2025). However, it is clear from the draft that full exemptions are likely to be rare. Further, based on the new guidance it appears that even if a full exemption is approved, the CBC reporting parent will need to file a statement to indicate that it has been granted a full exemption for the relevant year.
Guidance on completing the Public CBC report
The ATO instructions divide the Australian Public CBC report into the following four sections:
- Section A – reporting entity details and declaration of authorised representative
- Section B – identifies each member entity of the CBC reporting group, by its jurisdiction of residence, and includes the ‘Statement on Approach to Tax’
- Section C – includes information to be published on a CBC basis for Australia and each specified jurisdiction (and for each non-specified jurisdiction, for entities who choose to report all jurisdictions separately)
- Section D – includes aggregated information to be reported for members of the CBC reporting group not included in Section C
The draft guidance also includes guidance on how to submit the Public CBC report and how to correct a Public CBC report if a material error is identified after submission.
Whilst the guidance includes instructions on populating each question/data point, we have highlighted some key takeaways below:
- Declaration requirements: A declaration will be required from an authorised officer of the entity (or alternatively, from the authorised tax agent) that the information being filed is true and correct.
- Terminology: Limited new guidance has been provided in the draft instructions on how to interpret particular definitions. A general hierarchy of guidance has been provided (whereby legislative definitions take precedence; followed by those outlined in GRI 207 Tax Standard; followed by those outlined in the OECD Guidelines); however, in most cases, specific detail has not been provided.
- Compilation requirements: The source data used in populating the Public CBC report must be based on consolidated financial statements, or on information that can be reconciled to consolidated financial reports. Consistent with the legislation, the guidance notes that audited consolidated financial statements must be used, or, in the event that these are not prepared, the information must be based on amounts that would be shown in such statements had the entity been a listed company and required to prepare these.
- Business activity disclosures: The ATO’s expectations of the business activity descriptions (for both Australia / specified jurisdictions, in addition to the remaining jurisdictions on an aggregated basis) appear to be more detailed than those required under OECD CBC reporting guidance. For OECD CBC reporting, business activities are reported in a standardised tick the box format for each entity based on a set of 12 defined options or a brief description of any ‘other’ activities not falling within one of the options. For Australian Public CBC reporting, the business descriptions will be reported in a free-text field allowing up to 4,000 characters. An appropriate industry classification code may be used (e.g. ANZSIC, NACE), although this is not mandatory, and further details of the primary core activities undertaken in the relevant jurisdiction will also be required. The following example has been provided by the ATO:
- “ANZSIC 7000 Computer System Design and Related Services – XYZ Pty Ltd primarily engaged in providing IT consulting, software development, and systems integration services. Activities include designing and developing custom software, managing IT infrastructure, and offering cybersecurity and cloud computing solutions.”
- In contrast, the same entity might be presented in an OECD CBC report with a tick for “Research and Development”.
- ‘Approach to Tax’ statement: The ‘Approach to Tax’ statement should align with GRI 207, in particular ‘GRI 207-1 Approach to tax’. Some high level examples of what may be covered in this statement are provided by in the draft instructions, noting that the required field is in free-text format, allowing up to 5,000 characters. (For context, this is about one typed page, single-spaced, 12-point font, standard margins.)
- Difference in income tax paid/accrued: An explanation is required of the difference between income tax accrued in the current year, and the amount of income tax due if the income tax rate applicable to the jurisdiction had been applied to the profit/loss before income tax amount. The guidance suggests that the explanation accounts for “any material discrepancies”, with no further definition of this provided by the ATO. The explanation may include reasons such as “timing differences, tax reliefs, allowances, incentives or any special tax provisions where members of the CBC reporting group in the relevant jurisdiction benefitted”. This free text field allows an input of maximum 4,000 characters.
- Revenue from related parties in other jurisdictions: This amount should be reported excluding domestic related party revenue and excluding amounts received from other members of the group which are treated as dividends in the payer’s jurisdiction. Entities should consider the availability of such information internally, noting that this requirement is relevant to disclosures for both Australia / specified jurisdictions, as well as those being reported on an aggregated basis.
- Number of employees: The number of employees for each jurisdiction is to be reported based on the number of full-time equivalent (FTE) employees at the end of the period. Independent contractors may be included if they are “involved in the entity’s ordinary operations”. This differs from and appears less flexible than what is permitted under OECD CBC reporting, which allows average FTE data to be reported if reliable data is available.
Submitting the Public CBC report
The Public CBC report must be submitted by email, attaching a valid XML file generated by the reporting entity’s business management software. The XML file must conform to the structure, rules and data types defined in the ATO-developed XML Schema.
Correcting your Public CBC report
Material errors (for which no definition has been provided by the ATO) must be corrected within 28 days of becoming aware of the error. To amend your Public CBC report, you must fill out the approved form again with the corrected details and submit it through the same reporting process.
Penalties
Failure to comply with Australian Public CBC reporting requirements can result in penalties where you do not publish the information within 12 months after the end of the reporting period to which it relates, or if you fail to correct a material error within 28 days of becoming aware of the error. The financial penalties for non-compliance may be up to $825,000.
Action may also be taken to apply civil penalties (under Section 8E of the Tax Administration Act 1953) to entities failing to comply with their obligations to publish the selected tax information.
Interaction with the Voluntary Tax Transparency Code
It is also worth noting that the Board of Taxation has recently issued its redesigned Voluntary Tax Transparency Code (VTTC) which will start from 1 July 2026. The redesigned VTTC is said to complement other transparency initiatives including Public CBC reporting, while giving entities outside these initiatives a framework for reporting information about their tax affairs. Under the redesigned VTTC, which remains voluntary, entities should confirm if they are a Public CBC reporting parent and that they have complied with their Public CBC reporting requirements. It also provides a range of optional reporting requirements for Public CBC reporters and recommends that the VTTC is published no later than the publication date of the Public CBC report for the same period.
The takeaway
The Australian Public CBC reporting regime is a regulated disclosure with strict form, content and timing requirements. Whilst this latest draft guidance provided by the ATO is subject to consultation, it provides affected taxpayers with more context as to how they will be required to practically complete the submission of their first Public CBC report.
There are several key differences from OECD CBC reporting, which mean that reporting entities will need to implement a robust process to ensure their current CBC report is appropriately adjusted to comply with the Public CBC reporting requirements.
Contact us
Nick Houseman
Australian Transfer Pricing Leader, PwC Australia
Georgie Hockings
Partner, Tax & Legal, PwC Australia
Sarah Stevens
Managing Director, Tax, PwC Australia
Greg Weickhardt
Partner, Global Tax, Melbourne, PwC Australia
Sarah Saville
Partner, Tax Reporting and Innovation, PwC Australia
Chris Vanderkley
Special Counsel, PwC Australia
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