Country-by-country (CBC) reporting is part of a suite of international measures aimed at combating tax avoidance.
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What is CBC reporting
CBC reporting involves the comprehensive exchanges of information between participating jurisdictions.
It implements Action 13External Link of the Organisation for Economic Co-operation and Development (OECD) / G20 base erosion and profit shifting (BEPS) project.
CBC reporting applies to income years commencing from 1 January 2016. It requires certain entities to lodge the following 3 CBC reporting statements:
- CBC report
- master file
- local file.
These reporting statements include disclosures on:
- the revenues, profits and taxes paid by the global group, broken down by tax jurisdiction
- the operations and activities of the global group to which an entity belongs
- an entity's international related party dealings.
All CBC reporting statements must be lodged within 12 months of the end of the relevant reporting period.
CBC reporting obligations
CBC reporting applies to entities that were either a CBC reporting entity or a Significant global entity (SGE) for a period prior to their income year.
Whether your CBC reporting entity status or SGE status triggers CBC reporting obligations depends on the start date of your income year, as follows:
- For income years starting on or after 1 July 2019, CBC reporting applies to entities that were a CBC reporting entity for the whole or a part of their previous income year.
- For income years starting on or after 1 January 2016 but prior to 1 July 2019, CBC reporting applies to entities that were SGEs for the whole or a part of their previous income year.
CBC reporting entities
A CBC reporting entity is defined in Subdivision 815-E of the Income Tax Assessment Act 1997. An entity is a CBC reporting entity if it is either:
- a CBC reporting parent which can be a standalone entity whose annual global income is A$1 billion or more, or a member of a CBC reporting group who is not controlled by another entity in the group and has annual global income A$1 billion or more
- a member of a CBC reporting group, and one of the other group members is a CBC reporting parent.
A CBC reporting group may be a group that is consolidated for accounting purposes as a single group or a notional listed company group.
A notional listed company group is a group of entities that would be required to be consolidated as a single group for accounting purposes if a member of that group were a listed company. An entity that is not consolidated for accounting purposes on the basis that the entity is immaterial is included as part of the notional listed company group.
More information about the CBC reporting entity definition, including the specific rules that define a CBC reporting group by the notional listed company group concept, can be found on our guidance page, CBC reporting entities.
Significant global entities
For income years commencing before 1 July 2019, CBC reporting applies to SGEs, as defined prior to the amendments made by the Treasury Laws Amendment (2020 Measures No. 1) Act 2020. For more information on the definition of SGE prior to the amendments, see Significant global entities – prior to July 2019.
For more information about the definition of SGE following the amendments made by the Treasury Laws Amendment (2020 Measures No. 1) Act 2020, see Significant global entities.
Lodging CBC reporting statements
CBC reporting statements (CBC report, master file, local file) must be submitted to us using a validly generated XML file. This XML file is usually generated by your business management software (that is, tax reporting or accounting software).
You may need to contact your digital services provider to check whether they support lodging CBC reporting statements with us.
The CBC report (referred to in OECD documentation as a 'CBC report') must be lodged in the approved form. The approved form follows the OECD XML schema.
This schema enables the standardised exchange of CBC reports between jurisdictions.
OECD schema v2.0 must be used for all lodgments. The schema is downloadable from County-by-country reporting XML schema: user guide for tax administrationsExternal Link.
Local file / master file (LCMSF)
The local file and master file must be lodged in the approved form. The approved form follows the ATO-developed LCMSF XML schema.
The local file and master file may be lodged simultaneously or separately using the same XML file. The CBC report must be lodged separately.
The XML schema also contains questions in relation to your obligation to lodge the CBC report (that is, the CBC report notification).
How to lodge
CBC reporting statements must be lodged through one of these channels:
Paper or email lodgments of CBC reporting statements will not be accepted.
When you lodge CBC reporting statements through one of the appropriate channels, you will receive a message from the channel indicating that your lodgment has been successfully submitted. This does not mean that your lodgment has been accepted in our systems, as it will be subject to further validations.
The validations performed by our internal systems seek to ensure that CBC reporting lodgments comply with the relevant schema requirements.
When the lodgment goes through the validation process by our internal systems, an email will automatically be sent – to the contact email address provided in the lodgment – within 3 working days.
Outcome of lodgment
As long as a valid email address has been provided, the email you receive will do one of the following:
- Confirm that your lodgment has been accepted.
- Advise that your lodgment has not been accepted, with details of the errors that led to the lodgment failing validation. For further explanation, see Guidance on lodgment errors.
- Confirm that your lodgment has been accepted but we have found an issue with one or more entities listed in your documents – for example, other entities we have been unable to identify due to an incorrect name, tax file number (TFN), Australian business number (ABN) or both. These other entities may include
- constituent entities within a CBC report
- 'on behalf of entities' within a master file or CBC report notification (or both).
If you don't receive a lodgment confirmation email within 7 days of making your lodgment, contact the CBC reporting team. Penalties will not apply if you've lodged your CBC reporting statements by the due date but haven't received the lodgment confirmation email until after the due date.
Providing a valid email address
To ensure that you receive an email confirming lodgment (or advising that your lodgment has not been accepted by our systems), you must provide a valid email address:
- In an LCMSF lodgment, this email address should be provided in the LCMSF21 (Reporting entity email) or LCMSF4 (Intermediary email) fields. If email addresses are provided in both fields, the confirmation of lodgment will be sent to the intermediary.
- In a CBC report lodgment, this email address should be provided in the Contact field. Note that more than one address can be provided in the Contact field. If this occurs, then the confirmation of lodgment will be sent to the first email address specified in this field.
If you have trouble using Online service for agents, Online services for business or the Standard Business Reporting (SBR) channel when attempting to lodge your CBC report, contact your digital service provider.
If your digital service provider cannot resolve the issue, they will log a ticket with the Digital Partnership Office (DPO). When logging a ticket with DPO, your digital service provider will need to supply any message IDs or digital receipts (such as validation reports) received from SBR.
To lodge an amended Part A, Part B, or short form local file, complete the component with the updated information and lodge using the same process as the original lodgment. The amended component will replace the original lodgment submitted and will be recorded as the ‘latest’ record. There is no need to replicate the other text that is not being amended. It is just the amended component that needs to be recorded as part of the amendment process.
To amend an exemption to a local file from a ‘No’ to a ‘Yes’, ensure at least one other component of the LCMSF form is submitted – for example, any component of the local file not being amended, master file, or CBC report notification.
The local file / master file (LCMSF) schema has been designed in such a way that each of the components can be lodged independently of each other. This enables each of the LCMSF components (and amendments to those components) to be lodged at different times throughout the year. Accordingly, an amendment to Part A can be lodged on its own and will not override other LCMSF components.
To amend a master file, complete the component with the updated information and lodge using the same process as the original lodgment. The amended component will replace the original lodgment submitted and will be recorded as the ‘latest’ record. Because of this functionality, all fields must be completed in the master file as this will replace the earlier document in our systems.
The LCMSF schema has been designed in such a way that each of the components can be lodged independently of each other. Accordingly, an amendment to the master file can be lodged on its own and will not override other LCMSF components.
CBC report notification
To amend a CBC report notification, complete the full CBC report notification, which includes the amended and original fields. The amended CBC report notification will replace the original CBC report notification submitted and will be recorded as the ‘latest’ CBC report notification record. Because of this functionality, all fields must be completed in the CBC report notification as this will replace the earlier document in our systems.
To amend an exemption to a CBC report notification from a ‘No’ to a ‘Yes’, ensure at least one other component of the LCMSF form – for example, short form, Part A or B of the local file, or master file) – is submitted to avoid triggering a validation error. Note that this will be remedied in upcoming revisions to the schema.
The LCMSF schema has been designed in such a way that each of the components can be lodged independently of each other. Accordingly, an amendment to the CBC report notification can be lodged on its own and will not override other LCMSF components.
If you have a question about your CBC report amendments, contact your digital service provider (DSP) in the first instance. DSPs have designed their software in alignment with the OECD requirements and will understand the mechanics behind the form.
They can help you lodge a successful amendment, ensuring the information conforms to the amendment rules outlined in the Country-by-country reporting XML schema: user guide for tax administrationExternal Link (See ‘CBC Correction examples’ on pages 28 to 36).
Further lodgment information is available here.
Hints and tipsTips for lodging
The following tips will help you lodge correctly:
- Check the details of the reporting entity and the details of any entities contained in your lodgment (name, ABN and TFN). These must match the details on our systems. Also check the name registered upon the entity's creation (for example, the ASIC registration or ABR registration).
- For an LCMSF lodgment, check that any attachments are in the correct format and have appropriate file names.
- For the CBC report, check that any identifiers – for example, DocRefIDs, MessageRefIDs, CorrDocRefIDs, CorrMessageRefIDs – are in the correct format, as set out in the Country-by-country reporting XML schema: user guide for tax administrationsExternal Link.
- We are unable to identify Australian company number (ACN) only entities when included in CBC reporting lodgments because the ACN entity will not have a record on our ATO systems. In this situation, you may receive a notification stating that lodgment was successful, but we are unable to match these entities. This means we have accepted the CBC reporting lodgment despite the inability to match the entity to ATO records and no further action is required.
Information to be included
For the CBC report, we have adopted the information requirements as outlined in Annex III of the OECD guidanceExternal Link on Action 13.
For the master file, we have adopted the information requirements as outlined in Annex I of the OECD guidanceExternal Link on Action 13.
For the local file, refer to the local file instructions. New local file instructions are released each year. Make sure you're using the latest version when preparing your local file.
Automatic exchange of CBC reports
Australia is one of over 80 jurisdictions that have signed the CBC reporting Multilateral Competent Authority AgreementExternal Link (MCAA) to facilitate the exchange of CBC reports between tax authorities in different jurisdictions.
Australia sends and receives CBC reports no later than 15 months from the end of the reporting period. No notice of exchange is provided to CBC reporting entities. Relevant multinational groups should presume that exchange is occurring on this timeframe for all constituent entities covered by an activated exchange agreement.
Comprehensive information on the activated exchange relationships between all participating jurisdictions, including Australia, is available on the OECD web page, Country-by-country reporting exchange relationshipsExternal Link. This includes details about the date of effect of an activated agreement. It also lists non-reciprocal jurisdictions that will provide CBC reports to a jurisdiction but have chosen not to receive CBC reports from a jurisdiction.
The MCAA does not facilitate the automatic exchange of local file and master file reports.
In circumstances where the CBC reporting parent (or global parent entity) operates in a jurisdiction that is not a party to the MCAA, exchange can still occur under bilateral agreements This includes Australia's tax treaties and Tax information exchange agreements. Australia currently has bilateral exchange arrangements in place with:
In circumstances where the CBC reporting parent (or global parent entity) operates in a jurisdiction that does not have an active exchange relationship with Australia for the CBC report, the global group could choose to file the CBC report in another jurisdiction that will exchange with Australia. This is sometimes called ‘surrogate parent filing'.
Supporting material and resources
To assist you in meeting your obligations under subdivision 815–E of the Income Tax Assessment Act 1997, our general guidance on CBC reporting outlines our administrative practice, including information on:
- CBC reporting obligations (restructures, accounting and tax consolidated groups)
- exemptions (including transfer relief)
- administrative matters (including extensions, local file administration solution, replacement reporting periods)
- instructions for the CBC report
- instructions for the master file
- instructions for the local file
- document formats.
If you have any questions or feedback, contact the CBC reporting team at CBCReporting@ato.gov.au.
Country-by-country (CBC) reporting is part of a suite of international measures aimed at combating tax avoidance.