Show download pdf controls
  • Exemptions (including administrative relief)

    In some circumstances you may qualify for exemption from some or all of your CbC obligations. We provide exemptions in three ways:

    • administrative relief, without the need to request an exemption
    • fast track exemption
    • exemption on formal request.

    The circumstances where administrative relief is available are described in the sections Administrative relief – CbC report to Dormant entities of this guidance. If you qualify we will apply the relief to you using information you have lodged or will lodge with us.

    A fast track exemption is available if you meet specified conditions and you send an email to CbCReporting@ato.gov.au confirming that you meet those conditions. We will acknowledge your exemption by email reply.

    Alternatively, if your circumstances do not qualify for administrative relief or a fast track exemption, you may lodge a formal exemption request setting out your grounds for believing that an exemption is warranted. You or your authorised representative may request an exemption from some or all of your obligations by emailing your request to CbCReporting@ato.gov.au.

    If you are not the SGE’s authorised representative, you will need to provide a letter of authority from the SGE to request an exemption on its behalf.

    A request for exemption should set out the facts and circumstances relevant to your CbC reporting obligations, including:

    • the statements from which you seek exemption (that is, one or more of the CbC report, master file and local file)
    • the reporting period(s) for which you seek exemption
    • the name(s) and TFN(s) or ABN(s) of the entity or entities for which you seek an exemption
    • the name of your global parent entity and the country in which it is a tax resident
    • your reasons for seeking an exemption.

    If you are the head company of a tax consolidated or MEC group, your request will be taken to cover the tax consolidated or MEC group. If you are requesting an exemption on behalf of entities outside the tax consolidated or MEC group (entities that are members of the same group of entities consolidated for accounting purposes), you should identify those entities in your request. You must have authorisation to act on their behalf.

    On this page:

    Fast track exemption

    Fast track exemptions for one or more CbC statements are available in certain scenarios. You can self-assess your eligibility and advise us by email that you meet the conditions required for the exemption.

    The following table lists the fast track exemption scenarios:

    Type of scenario

    Exemption available

    Exemption period

    1. You are an Australian global parent entity, or a member of a group consolidated for accounting purposes with an Australian global parent entity, where the group has no foreign operations. No foreign operations means no constituent entity or permanent establishment outside Australia.
     

    CbC report and master file

    Up to three years

    1. Scenario 1 above, with the additional fact that you have no international related party dealings.
     

    Local file

    Up to three years

    1. The annual global income of your foreign global parent entity meets the Australian SGE threshold (A$1 billion), but falls below the CbC reporting foreign currency threshold in the jurisdiction of the foreign global parent entity.
     

    CbC report

    One year

    1. Scenario 3 above, with the additional fact that Australia is the only jurisdiction in which the global accounting group has an obligation to lodge a master file.
     

    Master file

    One year

    1. You were an SGE in the preceding year due to your membership of a group of entities, but left that group during the CbC reporting year due to demerger or sale to another entity and will not be an SGE under your new structure.
     

    CbC report and master file

    One year

    1. You are a foreign resident with an Australian permanent establishment.
     

    CbC report

    Up to three years

    1. You have no international related party dealings and, if you are a foreign resident operating through an Australian permanent establishment, no cross-border internal dealings.
      (Note that if you are an Australian resident company we automatically apply exemption from lodging a local file if you declare in your tax return that you have no transactions or dealings with international related parties for the reporting year).
     

    Local file

    One year

    If you qualify for a fast track exemption because of a scenario above, you may send an email to CbCReporting@ato.gov.au identifying the scenario, the income year(s), the entity(ies) to be covered by the exemption and confirming that the conditions are met. Please include 'Fast track exemption' in the email subject. We will acknowledge your exemption by email reply.

    Lodging a formal exemption request

    We recommend that you make an exemption request as early as possible to allow us to consider it and notify you of our decision before the statutory due date for lodging your CbC reporting statements.

    If you make a formal exemption request close to the statutory due date, you may also need to make a request for an extension of time to lodge. You can combine these requests.

    We aim to make a decision on your formal exemption request within 28 days of receiving all the relevant information from you.

    Exemption considerations

    We make a decision on each exemption request having regard to your facts and circumstances and the purpose of CbC reporting. Before doing so, we may request further information. We set out below your circumstances that may be relevant to considering an exemption from lodging a particular CbC reporting statement. These circumstances are not exhaustive.

    If you are the global parent entity, circumstances that may be relevant to an exemption from lodging a CbC report include:

    • whether any member of your group consolidated for accounting purposes is a foreign resident, or carries on business through a permanent establishment in a foreign jurisdiction
    • whether one or more foreign jurisdictions may expect automatic exchange of the CbC report by Australia
    • whether there are any cross border dealings between constituent entities of your group.

    If you are not the global parent entity, circumstances that may be relevant to an exemption from lodging a CbC report include:

    • whether any other entity in your global accounting group has an obligation to file the CbC report outside of Australia
    • whether voluntary filing of the CbC report in another jurisdiction is available to your global parent entity or another foreign entity in your global accounting group
    • the materiality of the business operations in Australia in terms of transfer pricing risk or other BEPS related risks for Australia
    • any transitional circumstances arising from delays in implementation of CbC reporting in other jurisdictions.

    Circumstances that may be relevant to an exemption from lodging a master file might include:

    • whether any member of your group consolidated for accounting purposes is a foreign resident, or carries on business through a permanent establishment in a foreign jurisdiction
    • whether any other entity in your global accounting group has been or will be required to prepare or file the master file outside of Australia
    • any transitional circumstances arising from delays in implementation of CbC reporting in other jurisdictions
    • the materiality of the business operations in Australia in terms of its transfer pricing risk or other BEPS related risks for Australia.

    Circumstances that may be relevant to an exemption from lodging a local file include: 

    • you have no international related party dealings (IRPDs)
    • whether you have IRPDs with entities in the specified countries listed in the International dealings schedule instructions for the income year that most closely corresponds to the relevant reporting period(s)
    • you are currently subject to a risk review or audit (an active compliance product relevant to transfer pricing risk or other BEPS related risks)
    • the materiality of the business operations in Australia in terms of its transfer pricing risk or other BEPS related risks for Australia.

    Exemption scope

    If an exemption is granted, the notice will outline which statements you are exempt from providing and the reporting period(s) to which the exemption applies.

    If the circumstances relevant to an exemption are not expected to change in the foreseeable future, an exemption may be given for up to three reporting periods. You may seek to extend an exemption.

    Exemptions provided for transitional reasons such as delays in CbC implementation in another jurisdiction will usually be granted for one year. A further period may be considered if circumstances require.

    Changes in circumstances

    Exemptions are granted on the condition that you will notify us in a timely manner by emailing CbCReporting@ato.gov.au to advise of any material changes in the facts and circumstances outlined in your exemption request. You should also notify us of any other change that may affect your exemption.

    Examples of where you may need to advise us of changes to facts and circumstances include: 

    • you subsequently acquire a foreign resident entity that you consolidate for accounting purposes as a single group
    • you no longer engage in IRPDs, or you commence having IRPDs, or you significantly increase your IRPDs.

    Review rights

    If you are dissatisfied with our exemption decision, you can seek to have it reconsidered by emailing CbCReporting@ato.gov.au.

    A CbC reporting exemption decision is not a 'reviewable objection decision'. This means you do not have the right to lodge an objection with us or have the decision reviewed by the Administrative Appeals Tribunal.

    You can apply for a review by the Federal Court under the Administrative Decisions (Judicial Review) Act 1977. You will need to lodge your application within 28 days of the date of this letter. Go to the Federal Court of Australia websiteExternal Link for more information.

    Administrative relief – CbC report

    This section describes two scenarios in which you may qualify for relief from filing a CbC report. These concessions are designed to align CbC report filing with the OECD model.

    We will not seek the CbC report from you if your global parent entity is resident for tax purposes in a foreign jurisdiction and one or more of the following applies:

    • your global parent entity is under an obligation to file a CbC report in their jurisdiction of tax residence and Australia has an active CbC exchange agreement with that jurisdiction
    • your global parent entity or another entity in your global accounting group (a 'surrogate parent entity') voluntarily files a CbC report in its jurisdiction of tax residence for exchange under an active CbC exchange agreement with Australia

    If you are relying on a filing by a surrogate parent entity you should confirm with that entity that it has filed in that capacity.

    When you provide your local file and/or master file, you will provide the name of your global parent entity and the jurisdiction in which it is a tax resident. You will be able to state whether that entity or another entity in the accounting group has lodged (or will lodge) on your behalf – including their jurisdiction of tax residence. This information is taken as notification of your intention to use the administrative relief described in this section.

    Administrative relief – local file

    If you are an Australian resident company that was an SGE for the whole or a part of the previous income year and you declare in your tax return that you have no transactions or dealings with international related parties for the reporting year, we will not seek a full local file or a short form local file from you for that period.

    For the 2017 income year onwards, this is only available in the company tax return and is evidenced by answering No at Question 26. You will still need to consider your obligations in relation to the CbC report and master file.

    See also:

    Tax exempt entities under Division 50 of the ITAA 1997

    If you are an SGE and a tax exempt entity under Division 50 of the ITAA 1997 (a 'Division 50 entity'), we will not seek CbC reporting statements from you. This relief applies automatically; no separate exemption request is required.

    This relief also applies to you if you are a taxable entity that is a wholly owned subsidiary of a Division 50 entity. You need to identify the Division 50 entity in your tax return as your ultimate holding company (UHC) to access this relief.

    There is one exception to this concession. If you are the global parent entity and you have a foreign constituent entity or foreign permanent establishment, you will need to lodge a CbC report. We will not require you to lodge a master file or local file.

    National Tax Equivalent Regime

    If you are an SGE and a National Tax Equivalent Regime (NTER) entity or a wholly owned subsidiary of such an NTER entity, you will generally not be required to lodge CbC statements. We will apply this treatment automatically.

    There is one exception to this concession. If you are the global parent entity and you have a constituent entity or foreign permanent establishment, you will need to lodge a CbC report. A master file or local file is not required.

    Dormant entities

    If you are a dormant entity for the reporting period and an SGE for the whole or part of the previous income year we will not seek CbC reporting statements from you (the CbC report, master file, local file) if you:

    • are the only Australian presence (entity or PE) of your global group
    • are not the ultimate parent entity of the global group
    • have notified us that no income tax return is required for the income year.

    If you are a dormant entity and your global group does have another Australian presence (entity or PE) with CbC reporting obligations, the standard administrative relief which takes into account the filing of statements by other entities will apply to your obligations. You will not be required to file a local file if you have notified us that no income tax return is required for the income year.

    Ceasing operations or winding up

    If an entity with a foreign global parent entity is an SGE in an income year and it is wound up during the year or, if the Australian presence was a PE, it ceased to be a PE during the year, a final tax return for the period of its existence may still be required. While this final return would reflect activities for a period less than 12 months the tax return is nevertheless for a full income year and CbC reporting statements are still required for that income year.

    The winding up or cessation will not, on its own, be considered grounds for exemption. However, the administrative relief provided above in relation to dormant entities or companies with no IRPDs may apply to you. Alternatively we may consider a request for exemption from lodging one or more CbC statements if the business activities or transfer pricing risks during the year are immaterial.

    If none of the administrative relief applies and an exemption is not granted, you will need to make arrangements for filing the required statements.

    CbC reporting statements are not required for the income year after the income year of winding up or ceasing to be a PE.

    Difficulties in accessing information

    We expect foreign parent entities to support local entities to meet all local legal requirements, including tax obligations. If you experience genuine difficulties in obtaining information or reports from your global parent entity or other entity in the MNE group, you can outline your circumstances to us by emailing CbCReporting@ato.gov.au.

    In doing so, you will need to fully describe the difficulties you are encountering in accessing the necessary information. We will consider how you can best meet your obligations including whether your particular circumstances support an extension of time or a temporary exemption.

      Last modified: 23 May 2019QC 54484