Findings report RTP – Public and multinational businesses

About this report

In this report we provide the aggregated disclosures made by large public and multinational companies for the 2021–22 to 2024–25 income years under Category C of the reportable tax position (RTP) schedule for companies as of 30 June 2026. Further lodgments of RTP schedules after this date will not be included for this report.

The data provides insights as to the prevalence of key corporate tax risks in relation to large public and multinational entities. The range of risk levels can vary across the lodging population. We consider and verify the level of risk reported as part of our compliance program. Generally, this corresponds with our assessment of the disclosed arrangements.

RTP disclosures are provided to our specialist tax performance teams and reviewed under our compliance and assurance programs. These include the Top 100 Justified Trust program, the Top 1,000 Combined Assurance program and the Top 1,000 Next Actions program.

We monitor the lodgment of the RTP schedule to ensure RTP obligations are met. RTP disclosures help us understand and assess changes in tax positions and arrangements, including new arrangements taxpayers are entering into. The disclosures also assist us to prioritise our assurance activities.

We tailor our compliance approach to the risk rating disclosed by taxpayers. Taxpayers who have achieved justified trust (high assurance) will have a less intensive engagement approach however, we continue to monitor and verify their RTP disclosures.

We apply more intensive scrutiny for high risk disclosures to determine if they comply with the relevant legislative provisions. If we can’t gain this assurance at the review stage, we may undertake an audit or more intensive investigation through our assurance programs.

For more information about:

• how we use RTP disclosures and our assurance programs, see RTP and our assurance programs
• the purpose of the RTP and information disclosed, see Reportable tax position schedule.

Report highlights

This is the seventh year of publishing this report. It includes high-level observations on trends over the 4 income years 2021–22 to 2024–25, where practicable.

Improving areas of risk

There was an increase in RTP disclosures in 2024–25. Overall, we found there was:

• an increase in low risk arrangements
• a decrease or no change in the proportion of high risk disclosures.

New hybrid mismatch and thin capitalisation questions

Two new questions were added in 2024–25, related to the hybrid mismatch rules (question 46) and restructures and thin capitalisation debt deduction rules (question 47).

• Question 46: application of certain aspects of the 'liable entity' and 'hybrid payer' definitions to your arrangements (Taxation Determination TD 2024/4).
• Question 47: relates to restructures in response to the debt deduction creation rules (DDCR) contained in Subdivision 820-EEA of the Income Tax Assessment Act 1997.

Increase in lodging population provides greater insight of key risks across large taxpayers

The number of disclosures has increased by over a third and the number of schedules lodged has steadily increased by 14% over the 4 years 2021–22 to 2024–25. This reflects the progressive expansion of the lodgment requirements and growing population. In line with expectations of the lodgment thresholds, our Top 1,000 population is the largest lodging and disclosure population segment.

Linking RTP disclosures to the three-tier model

We have published the public and multinational business' three-tier model (3TM). The 3TM helps us understand key behaviours driving tax performance for large public and multinational businesses. In this year's report we have identified where RTP questions link to a 3TM behaviour, event or focus area.

We continue to focus on ensuring ongoing compliance

Overall, the data from RTP schedule disclosures indicates high levels of voluntary compliance by the large corporates reporting population. Our data checks show that some lodgers do make errors when responding. We use these insights to improve our instructions and follow up compliance activities.

For more information on how we’re improving the system for those who want to comply, and taking firm action against those who choose not to, see Tax and Corporate Australia.

Category C of the RTP schedule

Questions in Category C of the RTP schedule are typically linked to ATO public advice and guidance (PAG) products, such as:

• taxpayer alerts (TAs)
• practical compliance guidelines (PCGs).

Together these products cover the key systemic risks in relation to large public and multinational businesses. As such, the aggregate data provides insights about the prevalence of key tax risks in the population.

There are generally no materiality thresholds on Category C questions. Taxpayers who meet the lodgment criteria must disclose arrangements, irrespective of the impact on their overall tax outcomes.

Questions

Almost half of Category C questions in 2024–25 relate to arrangements described in taxpayer alerts. Over a third of the questions relate to PCGs and require taxpayers to self-assess the risk rating by applying the criteria in PCGs. The remaining questions relate to other risks.

Table 1: 2024–25 Category C questions and the related PAG product

Question number	PAG product
9, 14, 22–24, 39, 44, 45 and 47(new)	PCG
3, 11–13, 17, 25, 26, 33–36 and 41	TA
19, 21, 42 and 46 (new)	Other

Notes:

• Questions 28, 29, 31, 40 and 43 have not been included as they relate to private company arrangements. All disclosures are monitored; however, the risks are not part of the compliance program for public and multinational businesses.
• Questions that have been removed from the RTP schedule in 2024–25 or earlier years and questions added in later years are not included.

Disclosures

Taxpayers are only required to provide a response to a question under Category C if they have an arrangement covered by the question. This means not every schedule lodged will contain a response to every Category C question. For example:

• some taxpayers will have no disclosures to make
• some taxpayers will only have one question related to an arrangement
• some taxpayers may have multiple arrangements to disclose, or a question may ask them to make multiple disclosures.

Care needs to be taken when making comparisons across multiple years as the population of public and multinational business taxpayers and their arrangements change year on year. Therefore, any comparison across years may not be a comparison of the same arrangements or taxpayers. The population has changed over the years as the schedule has expanded to take account of substituted accounting periods and private entities. Disclosures made by private entities have not been included in this report.

In 2025–26 the RTP schedule expanded to superannuation entities and collective investment vehicles. There are now 3 separate schedules, including:

• RTP schedule instructions – companies
• RTP schedule instructions – super funds
• RTP schedule – collective investment vehicles.

Note: Only disclosures made by public and multinational entities in the RTP schedule – companies are included in this report.

For more information, see How we use RTP disclosures.

RTP lodgments and disclosures

Over the past 4 years there has been an increase in lodgments, a high level of lodgment compliance and increase in disclosures due to:

• improvements in processes
• an increase in questions
• expansion to the lodgment requirements to include more taxpayers and growing population.

There were over 2,100 lodgments made by public and multinational taxpayers, of which 1,555 made at least one disclosure against a Category C question in 2024–25. The number of lodgments increased by 14% over the 4 years from 2021–22 to 2024–25. These taxpayers reported 5,127 disclosures against Category C questions in 2024–25, which has increased by 37% over the 4-year period to 2024–25.

Figure 1: RTP lodgments and disclosures, 2021–22 to 2024–25

You can also view data for RTP lodgments and disclosures by year in table format.

Notes:

• Nil RTP disclosures refer to taxpayers that have lodged an RTP schedule but do not have any arrangements to disclose.
• This graph only includes questions that are current for public and multinational businesses in 2024–25. Taxpayers may have made disclosures on questions that were current in prior years but are not included for comparative purposes.

Disclosures by public advice and guidance product

Most Category C questions ask taxpayers to disclose whether they have arrangements covered by specific ATO public advice and guidance products, including taxpayer alerts and PCGs. The majority of disclosures relate to PCGs, which may apply to an entity irrespective of the risk level self-assessed by the entity.

Figure 2: Proportion of disclosures by public advice and guidance product, 2021–22 to 2024–25

You can also view data for the proportion of disclosures by type of public advice and guidance product in table format.

Lodgment and disclosures by program segment

RTP lodgments and disclosures at the program segment level provide high-level patterns and trends in the population. Data from 2021–22 to 2024–25 was considered for the Top 100, Top 1,000, Large risk strategy and Medium and emerging risk strategy program segments.

Figure 3: Lodgments by program segment, 2021–22 to 2024–25

You can also view data for the lodgments by program segment in table format.

Figure 4: Disclosures by program segment, 2021–22 to 2024–25

You can also view data for disclosures by program segment in table format.

Population trends identified at the segment level include:

• The Top 100 is the third largest population segment, with 10% of lodgments and 11% of disclosures in 2024–25. The proportion of Top 100 lodgments and disclosures remained relatively steady over the 4-year period to 2024–25.
• The Top 1,000 is the largest population segment, with 54% of lodgments and 59% of disclosures in 2024–25. This is expected given the demographics of this market.
• The Large risk strategy population had the second largest number of lodgments at 26%. Large risk strategy also had the second highest number of disclosures, at 23% in 2024–25.
• The Medium and emerging risk strategy population lodged 10% of RTP schedules in 2024–25 and made 7% of disclosures. This is expected due to the lodgment criteria of the RTP schedule.

Figure 5: Disclosures by program segment, for PCG questions for 2024–25

You can also view data for disclosures by program segment for PCG questions in table format.

Notes:

• This chart includes disclosures for question 9 (offshore hub arrangements), question 14 (related party financing arrangements), question 22 (hybrid arrangements), question 23 (related party financing derivatives), question 24 (inbound distribution arrangements), question 39 (hybrid arrangements), question 44 (intangible migration) and question 47 (thin capitalisation).
• Question 45 (intangible migration) is not included as the risk categories do not align with all other PCG questions.

The breakdown of risk ratings for PCG-related questions in 2024–25 shows the distribution of risk levels between the population segments. Medium and emerging (11%) and Large risk strategy (9%) have the largest proportion of combined high risk and very high risk disclosures.

Both the Top 100 (75%) and Top 1,000 (69%) segments have a significant proportion of disclosures that are either low risk or white zone. This is consistent with our focus on compliance and assurance to reduce high risk and improve low risk outcomes.

Disclosures and the three-tier model

We have published the public and multinational business' three-tier model (3TM). The 3TM is a comprehensive model that leverages the OECD's 4 pillars of tax compliance (registration, lodgment, correct reporting, and payment), as well as the 'fifth pillar' of third-party reporting and payemnt, to consider all areas of tax performance and the tax and super laws.

The model is made up of 3 tiers that drill down to the behaviours we observe for public and multinational business:

• Tier 1: these are the major drivers of tax performance and non-performance for these taxpayers. These behaviours are what drives improvement or deterioration in the tax gap.
• Tier 2: these are the visible events for Tier 1 behaviours. They can impact on us achieving improvements in tax performance or preventing deterioration in the system.
• Tier 3: these are the specific focus areas for each Tier 2 event. This is where we intervene to address the behaviour.

For public and multinational businesses, we have identified 5 behaviours driving tax performance:

• international related party dealings
• cross-border investments structures
• domestic tax positions and structures
• administrative compliance obligations
• actions that support tax compliance.

In this year's report we have identified where RTP questions link to 3TM behaviours (Tier 1), events (Tier 2) and focus areas (Tier 3).

Disclosures by PCG-related questions

The following RTP questions relate to PCGs. Table 2 and Figure 7 provide a high-level summary and the number of disclosures for each question.

Table 2: Category C, PCG-related disclosures mapped to a 3TM behaviour, event and focus area, 2024–25

Question	Guidance	Behaviour	Event	Focus area
9	PCG 2017/1	International related party dealings	Transfer pricing and arm's length conditions	Offshore hubs and commodity pricing
14	PCG 2017/4	International related party dealings	Transfer pricing and arm's length conditions	Financing arrangements
22	PCG 2018/7	Cross-border investment structures	Hybrid arrangements	Offshore hybrid mismatches
23	PCG 2017/4	International related party dealings	Transfer pricing and arm's length conditions	Financing arrangements
24	PCG 2019/1	International related party dealings	Transfer pricing and arm's length conditions	Inbound supply chain distribution arrangements
39	PCG 2021/5	Cross-border investment structures	Hybrid arrangements	Importation of offshore hybrid mismatches
44	PCG 2024/1	International related party dealings	Intangible arrangements	Intangible migration arrangements
45	PCG 2024/1	International related party dealings	Intangible arrangements	Intangible migration arrangements
47 (new)	PCG 2025/2	Cross-border investment structures	Debt and capital structures	Restructuring in response to thin capitalisation rules

 

Figure 6: Disclosures by PCG-related questions, 2021–22 to 2024–25

You can also view data for the disclosures by PCG-related questions in table format.

Disclosures by taxpayer alert-related questions

The following RTP questions relate to taxpayer alerts. Table 3 and Figure 8 provide a high-level summary and the number of disclosures for each question.

Table 3: Category C, disclosures on arrangements subject to taxpayer alerts mapped to a 3TM behaviour, event and focus area, 2024–25

Question	Guidance	Behaviour	Event	Focus area
3	TA 2015/5	Cross-border investment structures	Income recognition from business operations	Attribution of profits through CFCs
11	TA 2016/10	International related party dealings	Transfer pricing and arm's length conditions	Financing arrangements
12	TA 2017/1	Domestic tax positions and structures	Characterisation of business activities	Business fragmentation
13	TA 2017/2 TA 2017/3 TA 2017/4 TA 2017/5	Domestic tax positions and structures	Claiming of other tax concessions or rates	Entitlements to R&D tax offsets
17	TA 2018/4	Cross-border investment structures	Debt and capital structures	Interest withholding tax
25	TA 2018/2	International related party dealings	Intangible arrangements	Characterisation of royalty payments
26	TA 2019/1	Cross-border investment schemes	Disposal of assets or businesses by foreign residents	MEC groups and CGT consequences
33	TA 2020/2	Cross-border investment schemes	Structuring through vehicles or arrangements	Synthetic equity arrangements
34	TA 2020/3	Cross-border investment schemes	Debt and capital structures	Interest withholding tax
35	TA 2020/4	Cross-border investment schemes	Disposal of assets or businesses by foreign residents	MEC groups and CGT consequences
36	TA 2020/5	Domestic tax positions and structures	Treatment of distributions	Claiming or accessing franking credits
41	TD 2024/4	Cross-border investment structures	Debt and capital structures	Restructuring in response to thin capitalisation rules

 

Figure 7: Disclosures by taxpayer alert-related questions, 2021–22 to 2024–25

You can also view data for disclosures by taxpayer alert-related questions in table format.

Note: Questions 33 and 36 are not included in the chart as no responses were received.

Disclosures on other questions

The following RTP questions relate to other areas of concern. Table 4 and Figure 9 provide a high-level summary and the number of disclosures for each question.

Table 4: Category C, Other questions mapped to a 3TM behaviour, event and focus area, 2024–25

Question	Guidance	Behaviour	Event	Focus area
19	n/a	Actions that support tax compliance	Engagement with the regulator	n/a
21	n/a	Administrative compliance obligations	Lodgment obligations	Lodgment and correct completion of annual return schedule
42	TD 2022/9	Cross-border investment structures	Hybrid arrangements	Offshore hybrid mismatches
46 (new)	TD 2022/9	Cross-border investment structures	Hybrid arrangements	Offshore hybrid mismatches

Note: question 19 maps to Tier 2 only.

Figure 8: Disclosures on other questions, 2021–22 to 2024–25

You can also view data for the number and percentage of disclosures on other questions in table format.

Disclosures in aggregate

Tables 2, 3 and 4 show all Category C disclosures mapped against the 3TM behaviour, event and focus area they relate to.

• The majority of RTP disclosures fall under Tier 1 international related party dealings (63%), Tier 2 transfer pricing and arm's length conditions, and include the following Tier 3 focus areas
  • financing arrangements (questions 11, 14 and 23), with 50% of disclosures
  • inbound supply chain distribution arrangements (question 24), with 7% of disclosures
  • offshore hubs and commodity pricing (question 9), with 6% of disclosures.
• The second highest number of disclosures fall under Tier 1 cross-border investment structures (27%), within Tier 2 hybrid arrangements, and includes the following Tier 3 focus areas
  • importation of offshore hybrid mismatches (question 39), with 25% of disclosures
  • offshore hybrid mismatches (question 22), with 2% of disclosures.

Figure 9: All RTP disclosures mapped to 3TM behaviour, event and focus area for 2024–2025

You can also view data for all RTP disclosures mapped to 3TM behaviour, event and focus area in table format.

Notes:

• The circles represent
  • Tier 1 behaviours (outer circle)
  • Tier 2 events (middle circle)
  • Tier 3 focus areas (inner circle)
• The 'Other' category includes
  • Other behaviours: actions that support tax compliance, administrative compliance obligations and domestic tax positions and structures
  • Other events: engagement with the regulator, lodgment obligations and treatment of distributions
  • Other focus areas: lodgment and correct completion of annual return schedule and claiming or accessing franking credits
• The 'Other cross-border investment structure' categories include
  • Other cross-border investment structure events: debt and capital structures, disposal of assets or businesses by foreign residents, income recognition from business operations, structuring through vehicles or arrangements
  • Other cross-border investment structure focus areas: interest withholding tax, MEC groups, attribution of profits through CFCs and CGT consequences, and accessing treaty benefits.

For more information on 3TM, see Public and multinational business three-tier model.

PCG-related disclosures

Self-assessing risks related to arrangements

PCG's provide a framework for corporate taxpayers and their boards to self-assess the risk associated with their arrangements and understand our likely compliance response. Self-assessment is voluntary, but we consider it best practice for corporate taxpayers to include self-assessment under PCGs as part of their standard tax governance processes.

If a taxpayer hasn’t undertaken the self-assessment, they must disclose a high risk rating in the schedule and tell us they haven't applied the PCG. This alerts us to examine the arrangement more closely to obtain confidence about the tax outcome.

Taxpayers must disclose their self-assessed risk rating in the corresponding Category C question. In some cases, they may be required to disclose multiple arrangements.

Offshore hubs: question 9 disclosures

Overview of question 9

Practical Compliance Guideline PCG 2017/1 provides guidance on transfer pricing issues related to centralised operating models that involve procurement, marketing, sales, and distribution functions.

We are concerned with the:

• mispricing of services and functions relating to the sales and marketing of goods and commodities provided by international related parties
• risk of inappropriate structuring of marketing hubs.

We monitor offshore procurement hubs that supply 'indirect' or 'non-core' goods or services (non-core product) to an Australian entity.

Figure 10: Disclosures on question 9, 2024–25

You can also view data for the disclosures on question 9 in 2024–25 in table format.

Note: PCG 2017/1 asks taxpayers to make a disclosure for each hub arrangement they have in place.

Disclosures on marketing hubs

Figure 11: Comparison of risk zone disclosures on marketing hubs in question 9, 2021–22 to 2024–25

You can also view data for the comparison of risk zone disclosures on marketing hubs in question 9 in table format.

Marketing hubs findings

In 2024–25, 113 taxpayers disclosed 190 marketing hub arrangements. The number of marketing hub disclosures has increased 17% over the 4 years to 2024–25.

The top 3 commodities sold via offshore marketing hubs are iron ore, coal and liquified natural gas (LNG). Only a very small portion of all exports sold via offshore marketing hubs are for commodities not produced by the energy and resources sector.

There were 2 high risk arrangements in 2024–25, both of which are either currently under review or audit under our compliance and assurance programs. Over the 4 years from 2021–22 to 2024–25, the number of high risk disclosures halved and the proportion of high risk disclosures decreased from 2% to 1%.

In 2024–25, 7 taxpayers self-assessed in the 'High risk – PCG not applied' category (who did not apply ATO risk methodology or calculate the tax impact), a decrease of one from the prior year.

All high risk arrangements are under either audit or review as part of our compliance and assurance programs.

In addition, 79% of total disclosures were rated as low risk in 2024–25. The low risk subcategory increased by 24 disclosures or 19% over the 4-year period to 2024–25.

The decrease in high risk disclosures and the increase in low risk disclosures indicates a positive behavioural shift for taxpayers undertaking these types of arrangements.

We continue to undertake a range of engagement activities in relation to the risk, including:

• engagement with industry bodies and other jurisdictions
• working through our compliance and assurance programs.

Information from other schedules, such as the International dealings schedule (IDS) and Public country-by-country (CBC) reporting, are also used to understand and identify the risk.

Disclosures on non-core procurement hubs

Figure 12: Comparison of risk zone disclosures on non-core procurement hubs in question 9, 2021–22 to 2024–25

You can also view data for the comparison of risk zone disclosures on non-core procurement hubs in question 9 in table format.

Procurement hubs findings

In 2024–25, 81 taxpayers disclosed 138 non-core procurement hub arrangements, a decrease from 146 disclosures in the previous year. As taxpayers can procure from more than one offshore hub, they are required to report each hub arrangement.

The number of low risk disclosures increased by 2 (2%) over the last 4 years. In line with the past 2 years, there have been minimal high risk disclosures, indicating a continuation of the positive behavioural shift for taxpayers with these arrangements.

Related party finance: questions 14 and 23 disclosures

Overview of questions 14 and 23

Practical Compliance Guideline PCG 2017/4 allows taxpayers to self-assess the tax risk of their cross-border related party financing arrangements.

Schedule 1 sets out the risk assessment framework to determine the risk rating of cross-border related party debt. We expect the pricing of related party debt to align with the commercial incentive of achieving the lowest possible 'all in' cost to the borrower.

Schedule 2 is used to determine the risk rating of related party derivative arrangements.

Schedule 3 was introduced in 2020–21 and is related to outbound interest-free loans between related parties. It outlines the factors under which the risk score assigned to outbound interest-free loans made between related parties may be modified for the purposes of Schedule 1.

Given the prevalence and the significant tax outcomes involved, we actively investigate these arrangements. We continue to undertake assurance activities on arrangements disclosed in the red and amber zones by Top 100 and 1,000 taxpayers. We have strategies in place to address high risk arrangements where the loan amounts are less significant, including where the disclosures come from taxpayers in the Large risk strategy and Medium and emerging risk strategy population segments.

The review of related party financing arrangements is an inherent element of the assurance work we undertake. This involves reviewing the application of PCG 2017/4 against the taxpayer’s relevant loan agreements and transfer pricing documentation.

Figure 13: Disclosures on questions 14 and 23, on related party finance 2024–25

You can also view data from disclosures on questions 14 and 23 in table format.

Notes:

• 'Not disclosed' refers to disclosures by taxpayers who included the question number but didn’t include the subcategory number on their schedule.
• Schedule 3 was introduced in 2020–21 with its own separate risk zone subcategories to distinguish outbound interest free loans as outlined under Schedule 3 of PCG 2017/4.

Findings from question 14

Disclosures on related party financing

Figure 14: Comparison of risk zone disclosures on related party financing arm's length conditions in question 14, 2021–22 to 2024–25

You can also view data on risk zone disclosures on related party financing arm's length conditions in question 14 in table format.

Notes:

• 'Not disclosed' refers to disclosures by taxpayers who included the question number but didn’t include the subcategory number on their schedule.
• Schedule 1 risk zone subcategories have been combined with Schedule 3 to provide a complete picture of disclosures made and historical comparison.

Question 14 received the highest number of disclosures, with 2,447 disclosures made in 2024–25, a slight increase of 1% from the previous year.

The number of disclosures increased by 30% over the 4 years to 2024–25, largely due to a 17% increase in disclosures in 2022–23.

Over the 4 years from 2021–22 to 2024–25, the spread of risk ratings has remained relatively stable regardless of the increase in the number of disclosures made.

The majority of disclosures (62%) are rated low risk. Low risk disclosures increased 36% over the 4 years to 2024–25 and 4% from the prior year. A further 36 disclosures (1%) are white zone. It is estimated that $134 billion of related party borrowings are covered by ATO settlements or white zone arrangements, representing 34% of total reported quantum.

The proportion of high risk disclosures has remained relatively stable, at around 10%, over the 4 years from 2021–22 to 2024–25. We profile all high risk disclosures, irrespective of their materiality, to determine whether further investigation is required.

The information from question 14 is analysed with other information, such as CBC and IDS, to better understand the risk.

Findings from question 23

Disclosures on related party financing derivatives

Figure 15: Comparison of risk zone disclosures on related party financing derivatives in question 23, 2021–22 to 2024–25

You can also view data on risk zone disclosures on related party financing derivatives in question 23 in table format.

Note: 'Not disclosed' refers to disclosures by taxpayers who included the question number but didn’t include the subcategory number on their schedule.

There were 93 disclosures made for question 23 in 2024–25, an increase of 5 from the previous year. There were 7 high risk disclosures in 2024–25, a decrease from 9 made the previous year. The majority of high risk disclosures have either been reviewed or are under review as part of our compliance and assurance program. More than 62% of disclosures made under question 23 have had or are currently undergoing compliance activity.

The proportion of low risk arrangements increased by 10 (17%) in 2024–25. The number of disclosures made across the subcategories has fluctuated over the 4 years to 2024–25, however the overall proportion of low risk arrangements has increased and the proportion of high risk arrangements has decreased, indicating a positive behavioural shift.

Hybrid arrangements: question 22 and question 39

Question 22

The hybrid mismatch rules are intended to deter the use of hybrid mismatch arrangements that result in double non-taxation outcomes by exploiting differences in the tax treatment of an entity or financial instrument under the income tax laws of 2 or more countries.

Question 22 relates to Practical Compliance Guideline PCG 2018/7, which has been designed to assist taxpayers to restructure into compliant replacement arrangements. These arrangements eliminate double non-taxation outcomes, consistent with the underlying objective of the hybrid mismatch rules.

We use data available from schedule disclosures and other information sources, such as question 49 on the IDS, to identify and monitor hybrid restructures undertaken and arrangements maintained by taxpayers. Our focus is on ensuring compliance with the hybrid mismatch rules through ongoing engagement.

Table 5: Disclosures on question 22, 2021–22 to 2024–25

Disclosure year	Low risk	Not low risk	Not disclosed	Total
2021–22	9	1	4	14
2022–23	6	0	2	8
2023–24	8	0	5	13
2024–25	8	0	0	8

Figure 16: Comparison of risk zone disclosures on hybrid arrangements in question 22, 2021–22 to 2024–25

You can also view data on risk zone disclosures on hybrid arrangements in question 22 in table format.

Findings from question 22

There were 8 disclosures for question 22 in 2024–25, a 38% decrease from 2023–24. This is in line with our expectations that the majority of restructuring would have occurred in earlier periods following the implementation of the hybrid mismatch rules on 1 January 2019.

In 2024–25, all 8 disclosures were self-assessed as low risk, which is consistent with the number of low risk disclosures received in the prior year. In contrast to 2023–24, when a further 5 disclosures were received without a self-assessed risk rating, all disclosures received in 2024–25 included a self-assessed risk rating. We verify these self-assessments when we engage with these taxpayers through our compliance and assurance programs.

There have been no disclosures made for 'not low risk' under question 22 since 2021–22.

Question 39

This is the fourth year of reporting under question 39, which was added to the RTP instructions in 2021–22. This question requires taxpayers to disclose self-assessed risk ratings using Practical Compliance Guideline PCG 2021/5.

PCG 2021/5 contains practical guidance as to the ATO’s assessment of the relative levels of tax compliance risk associated with imported hybrid mismatches addressed by Subdivision 832-H of the Income Tax Assessment Act 1997. It sets out the Commissioner’s approach to reviewing whether a taxpayer has undertaken reasonable enquiries in relation to the imported hybrid mismatch rule for non-structured arrangements.

Figure 17: Comparison of risk zone disclosures on hybrid arrangements in question 39, 2021–22 to 2024–25

You can also view data on risk zone disclosures on hybrid arrangements in question 39 in table format.

Findings from question 39

There were 1,297 disclosures made in 2024–25, a 5% increase from the prior year and 28% increase since 2021–22. PCG 2021/5 is relevant to any Australian taxpayer that seeks a deduction for a cross-border payment made to a member of its Division 832 control group. We therefore expect a large number of disclosures for this question.

In 2024–25, 1,088 disclosures (84%) were rated as low risk and a further 175 disclosures (13%) were rated as low-moderate risk or white zone. This indicates that 97% of taxpayers have applied PCG 2021/5 and followed our recommended approaches to demonstrate compliance with Subdivision 832-H.

There were 12 disclosures (1%) rated as very high risk in 2024–25. Of these, 4 have been reviewed as part of our compliance and assurance program, all of which received low assurance with specific recommendations to improve the processes implemented to demonstrate compliance with the imported hybrid mismatch rule. The remaining 8 very high risk disclosures will be reviewed as part of our compliance and assurance programs.

In 2024–25, 9 disclosures were rated as 'High risk – PCG not applied', of which:

• 2 satisfy the green zone requirements outlined in PCG 2021/5,
• 2 have been reviewed as part of our compliance and assurance program, both receiving low assurance with specific recommendations to improve the process implemented to demonstrate compliance with the imported hybrid mismatch rule
• 5 will be reviewed as part of our compliance and assurance programs where appropriate.

A further 11 disclosures did not provide a self-assessed risk rating. We consider these disclosures to be high risk. We continue to monitor these arrangements and may review them under our compliance and assurance programs at a later time.

The disclosures made under question 39 are used with other information sources, such as the IDS, to better assess risk with the imported hybrid mismatch rule.

Inbound distribution arrangements: question 24 disclosures

Overview of question 24

Practical Compliance Guideline PCG 2019/1 provides a framework for taxpayers to assess the transfer pricing risk of their inbound distribution arrangements. Our focus for PCG 2019/1 is on transfer pricing outcomes associated with the activities of inbound distributors, including the distribution of:

• goods purchased from related foreign entities for resale
• digital products or services where the intellectual property in those products or services is owned by related foreign entities.

We review the reasonableness of these disclosures as part of our Justified Trust program. Under this program we review the top 1,100 public groups and multinationals in Australia, including many inbound distributors. We use our data and analytics capabilities to assess the reasonableness of disclosures of distributors outside this population who are required to complete the RTP schedule. We employ a range of approaches to detect and address any incorrect disclosure or non-disclosure.

Figure 18: Comparison of risk zone disclosures on inbound distribution arrangements in question 24, 2021–22 to 2024–25

You can also view data on risk zone disclosures on inbound distribution arrangements in question 24 in table format.

Notes:

• 'Not disclosed' refers to disclosures by taxpayers who included the question number but didn’t include a valid subcategory on their schedule.
• 'PCG not applied' refers to taxpayers who choose not to follow the PCG or taxpayers who fall within either of the following categories
  • entities that have adopted the distributor simplified transfer pricing record keeping option in PCG 2017/2
  • paragraph 49 of PCG 2019/1 where an entity has an inbound distribution arrangement but an EBIT margin is unable to be determined and the taxpayer has not applied PCG 2019/1.
• PCG 2019/1 did not originally provide for an equivalent white zone similar to other PCGs covered in this report. However, PCG 2019/1 was updated in April 2026 and subsequently a white zone was added to question 24. This change will be reflected in the 2025–26 data.

Findings from question 24

There were 374 disclosures made at question 24 in 2024–25, an increase of 5% from the prior year. There has been an increasing trend in the number of question 24 disclosures made each year, with a 17% increase over the last 4 years since 2021–22. In particular, the

• number of low risk disclosures increased by 27 (26%) over the 4-year period and 8 disclosures (6%) from 124 in the prior year
• number of high risk disclosures increased by 13 disclosures (20%) over the 4-year period to 2024–25 and 4 disclosures (5%) from 74 in the prior year, while the proportion of high risk has remained steady at around 20%
• number of 'PCG not applied' disclosures decreased by 1 disclosure (3%) over the 4-year period to 2024–25.

These findings reflect a positive shift in behaviour for disclosures regarding these arrangements over time. We have concerns that taxpayers may be mischaracterising themselves as distributors with a low risk profit marker when in fact they are not. We continue to improve the guidance, including updating PCG 2019/1, which now includes a white zone subcategory. This change will be reflected in the 2025–26 data.

Most taxpayers who disclosed an inbound distribution arrangement:

• fall within our Top 100 or Top 1,000 populations
• are subject to review under our compliance and assurance programs or through the advance pricing arrangement (APA) program.

In addition, we tailor engagement and increase awareness to improve compliance and ensure inbound supply chain obligations are met.

Intangibles migration: question 44 and 45 disclosures

Overview of questions 44 and 45

Question 44 and 45 were introduced to the RTP schedule in 2023–24 and relate to Intangibles Migration Arrangements as set out in Practical Compliance Guideline PCG 2024/1. Our focus for PCG 2024/1 is:

• structuring issues and tax risks associated with cross-border arrangements between related parties involving the migration of intangible assets
• the mischaracterisation and non-recognition of Australian activities connected with intangible assets held offshore.

The PCG sets out our compliance approach and provides a risk assessment framework in relation to the risks that are in scope of the PCG.

In question 44, taxpayers are asked to disclose the migration of intangible assets entered into in the current income year and self-assess under the PCG.

Question 45 relates to current year non-migration arrangements and their connection with a prior migration of intangible assets in the last 5 years. RTP disclosures are reviewed as part of our Intangibles risk strategy.

Note: in 2023–24 RTP schedule instructions subcategory 7 was included for early balancing taxpayers with insufficient time to complete an assessment of the current migration arrangements.

Findings from question 44

Figure 19: International related party Intangibles Migration Arrangements that involved a migration of intangible assets in 2023–24 and 2024–25

You can also view data on International related party Intangibles Migration Arrangements that involved a migration of intangible assets in table format.

There were 73 taxpayers that disclosed 91 arrangements, a decrease of 13% from 2023–24 which was the first year of reporting at question 44.

In 2023–24, the additional subcategory 'unable to be rated due to insufficient time' was provided for early December balancing taxpayers with insufficient time to meet reporting requirements. This was a transitional category that was removed from the 2024–25 RTP schedule instructions, resulting in a shift of subcategories for disclosures in 2024–25.

The majority of disclosures were rated as lower risk (57%) with a further 16% rated as low-medium risk.

The number of disclosures rated as high risk remains unchanged in 2024–25. We either have reviewed or will be reviewing these disclosures and, if necessary, escalate to our compliance and assurance program for further investigation.

We use data available from the schedule together with information from other sources, such as the IDS and the Local File, to understand and monitor these arrangements.

Findings from question 45

Figure 20: International related party Intangibles Migration Arrangements in the current year that did not involve a migration of intangible assets in 2023–24 and 2024–25

You can also view data on International related party Intangibles Migration Arrangements that did not involve a migration of intangible assets in table format.

In the first year of reporting there were 240 taxpayers that made 251 disclosures at question 45. In 2024–25, 244 taxpayers (2% increase) made 263 disclosures (5% increase). Note that this number of disclosures is reflective of the breadth of the types of arrangements described in the PCG 2024/1.

In 2024–25, the majority of disclosures (73%) stated there were no intangible arrangements with a prior connection with prior migration. In 2023–24, the additional subcategory 'unable to be rated due to insufficient time' was provided for early December balancing taxpayers with insufficient time to meet reporting requirements. This was a transitional category that was removed from the 2024–25 RTP schedule instructions, resulting in a shift of subcategories for disclosures in 2024–25.

We use data available from the schedule together with information from other sources, such as the IDS and the Local File, to understand and monitor these arrangements. We will refer arrangements for further investigation as appropriate.

Restructures and the thin capitalisation and debt deduction rules: question 47 disclosures

Overview of question 47

Question 47 was introduced in 2024–25 in relation to restructures in response to the debt deduction creation rules (DDCR) contained in Subdivision 820-EEA of the Income Tax Assessment Act 1997. The question requires taxpayers to disclose if they have restructured or replaced an arrangement which would have been caught by the DDCR if it had remained in place or unchanged. Taxpayers are required to self-assess under the subcategories outlined, using the Risk Assessment Framework as outlined in Practical Compliance Guidance PCG 2025/2 Restructures and the thin capitalisation and debt deduction creation rules – ATO compliance approach. This information is used to determine the extent to which these restructures present a risk in respect of the general anti avoidance rules in Part IVA of the ITAA 1936 and any other provisions applicable to specific aspects of these restructures.

Findings from question 47

In the first year of reporting there were 32 taxpayers that made 32 disclosures. The majority of the disclosures (24 or 75%) reported under subcategory 3 (green zone), 6 disclosed under category 2 (yellow zone) and 1 red zone disclosure.

Figure 21: Restructures and the thin capitalisation and debt deduction rules in question 47, 2024–25

You can also view data on Restructures and the thin capitalisation and debt deduction rules in table format.

Disclosures on arrangements subject to taxpayer alerts and other questions

Taxpayer alerts and other questions

We issue taxpayer alerts to warn taxpayers of our concerns about new or emerging arrangements that we consider might pose a high risk, such as tax avoidance arrangements. Our aim is to share our concerns early to help taxpayers make informed decisions about their tax affairs. This also limits the proliferation of the arrangements in the market.

Our experience shows most large corporate taxpayers don’t wilfully take on tax risk. Taxpayers will often engage with us to gain certainty on arrangements we’ve indicated we have concerns with. They may apply for a ruling or APA or simply not enter into these arrangements, preventing proliferation.

You can find out more about taxpayer alerts.

Related party finance: questions 11, 17 and 33

Table 6: Disclosures on questions related to financing arrangements, 2022–23 to 2024–25

Question	Topic	Taxpayer alert	2022–23	2023–24	2024–25
11	Financing – round robin arrangements	TA 2016/10	4	3	4
17	Financing – WHT	TA 2018/4	9	11	10
33	Mischaracterisation arrangements connected with foreign investment	TA 2020/2	0	0	0

Risks associated with related party financing arrangements continue to be a key focus for us. We use the disclosures under questions 11, 17 and 33, together with data from the IDS and CBC reports, to identify and assess these risks.

Question 11

This question addresses Taxpayer alert TA 2016/10 Cross-border round robin financing arrangements.

The concern with these arrangements is that they involve funding of an overseas entity or operations by an Australian entity, where the funds are subsequently provided back to the Australian entity, or its Australian associate, in a manner which purportedly generates Australian tax deductions while not generating corresponding Australian assessable income.

Findings from question 11

There were 4 disclosures at question 11 in 2024–25 (an increase of one from the prior year). The new arrangement is subject to ongoing review as part of our compliance and assurance program and all other arrangements have been reported in prior years.

Question 17

Question 17 relates to Taxpayer alert TA 2018/4 concerning cross-border arrangements where income tax deductions are claimed in Australia on an accrual basis but withholding tax is not paid when deductions are claimed. We are concerned with:

• tax-driven structuring
• claiming a deduction where a payment is not expected to take place
• tax issues that arise from how the transaction is affected.

Findings from question 17

There were 10 disclosures made at question 17 in 2024–25, a decrease of one from the prior year. All disclosures have been reviewed or will be reviewed as part of our compliance and assurance programs.

Question 33

Question 33 was added to the schedule in 2020–21 and relates to mischaracterised arrangements and schemes connected with foreign investment into Australian entities as outlined in TA 2020/2. TA 2020/2 is concerned with cross-border arrangements that mischaracterise the structure used by foreign investors to invest directly into Australian businesses.

Findings from question 33

There were no disclosures made for question 33. The risk remains part of our compliance and assurance program.

Business fragmentation: question 12

Question 12 relates to arrangements involving the fragmentation of integrated trading businesses in order to re-characterise trading income to passive income to achieve a more favourable tax outcome, as described in Taxpayer alert TA 2017/1. Our concerns arise where an arrangement fragments integrated trading businesses to re-characterise trading income into more favourable passive income.

We combine the information obtained from disclosures at question 12 with data from transitional election forms to risk assess stapled groups. Those eligible taxpayers that have lodged a valid transitional election form may be entitled to claim transitional relief and continue to apply the lower 15% withholding rate during the transition period.

Findings from question 12

Table 7: Disclosures on questions related to business fragmentation, 2022–23 to 2024–25

Question	2022–23	2023–24	2024–25
Question 12	4	3	2

There were 2 disclosures at question 12 in 2024–25. All of the disclosures have been reviewed and reported in prior years. The decline in the number of arrangements is an indication of a positive shift in taxpayer behaviour.

Research and development (R&D): question 13

Taxpayer alerts for the R&D tax incentive relate to claims for ineligible activities and expenditure, including R&D tax incentive claims for ordinary business activities. Specific concerns are also identified within the following industry sectors:

• Taxpayer alert TA 2017/2 (construction activities)
• Taxpayer alert TA 2017/3 (any business activities)
• Taxpayer alert TA 2017/4 (agricultural activities)
• Taxpayer alert TA 2017/5 (software development activities).

Findings from question 13

Table 8: Disclosures on questions related to R&D, 2022–23 to 2024–25

Question	2022–23	2023–24	2024–25
Question 13 TA 2017/2	0	0	0
Question 13 TA 2017/3	3	4	4
Question 13 TA 2017/4	1	1	1
Question 13 TA 2017/5	5	3	4
More than one taxpayer alert	5	4	3
Total	14	12	12

There were 12 disclosures at question 13 in 2024–25, in line with the previous year.

The majority of disclosures for question 13 relate to TA 2017/3 (4 disclosures) and TA 2017/5 (4 disclosures). A further 3 disclosures relate to multiple taxpayer alerts and one relates to TA 2017/4. Where appropriate, we refer concerns identified with eligibility of R&D activities to the Department of Industry, Science and Resources, who are responsible for this aspect of the R&D tax incentive.

Material changes to settlement positions: question 19

Question 19 relates to breaches or material changes to facts covered by settlement deeds and future compliance arrangements. It is an important feature of our settlements that we achieve behavioural change and secure future tax outcomes.

Findings from question 19

Table 9: Disclosures on questions related to settlement deeds and future compliance arrangements, 2022–23 to 2024–25

Question	2022–23	2023–24	2024–25
Subcategory 1: breached one or more of the terms of the settlement deed or future compliance arrangement	1	1	1
Subcategory 2: changes in the relevant and material facts, as disclosed in the deed or arrangement, have occurred	2	7	1
Subcategory 3: compliant with the terms of settlement deed or future compliance agreement	n/a	30	29
Total	3	38	31

The number of disclosures increased from 3 disclosures in 2022–23 to 38 in 2023–24, due to the addition of subcategory 3 to question 19 in 2023–24. This requires taxpayers to disclose that they are compliant with their settlement deed or future compliance agreement, rather than just focus on instances of non-compliance.

The majority of taxpayers (94%) report under subcategory 3, which is an increase from the prior year (79%). Indicating taxpayers continue to be compliant with their settlement deeds and future compliance arrangements.

The number of disclosures made under subcategory 2, indicating changes in relevant and material facts, decreased from 7 in 2023–24 to one in 2024–25. Disclosures made under subcategories 1 and 2 are closely reviewed. We continue to monitor and engage with taxpayers to confirm compliance with the terms of their respective settlement deeds or future compliance arrangements where required.

Payments connected with intangibles: question 25

Question 25 relates to deductions for expenses incurred under an arrangement with offshore parties using intangible assets held by an offshore party, as described in Taxpayer alert TA 2018/2. Question 25 was added to the RTP schedule in the 2019–20 income year to inform whether intangible assets have been appropriately recognised and Australian royalty obligations have been met.

Findings from question 25

Table 10: Disclosures on questions related to intangibles as part of question 25, 2022–23 to 2024–25

Question	2022–23	2023–24	2024–25
Question 25	17	15	13

There were 13 disclosures at question 25 in 2024–25. Of these:

• 10 taxpayers indicated they had considered the arm’s length principle in determining the appropriate consideration for the use of the intangible assets, but the arrangement wasn't covered by section 284–255 (Taxation Administration Act 1953) compliant transfer pricing documentation – the majority of these taxpayers have disclosed at question 25 in prior years
• 2 taxpayers did not appropriately recognise an amount as consideration for the use of the intangible
• 1 taxpayer indicated that they had not applied the arm's length principle in determining the appropriate consideration for the use of intangible assets.

We use other information from other sources, such as the IDS, to understand these disclosures. Where appropriate, these will be reviewed through compliance and assurance programs.

We will continue to monitor and take action in relation to arrangements described under TA 2018/2 as part of our compliance and assurance programs.

Question 46

Question 46 was introduced in 2024–25 and relates to Taxation Determination TD 2024/4 Income tax: hybrid mismatch rules – application of certain aspects of the 'liable entity' and 'hybrid payer' definitions, which sets out the Commissioner's view on certain aspects of the 'liable entity' and 'hybrid payer' definitions when applying Australia's hybrid mismatch rules.

Taxpayers are required to make a disclosure at Question 46 if they had any arrangements in place in their Division 832 control group(s) which are covered by TD 2024/4. Taxpayers are also required to disclose one of three subcategories that best describes their current position. The subcategories identify whether the taxpayer has followed the Commissioner's view outlined in TD 2024/4 and recognise a hybrid payer in respect of the payment(s) made under the arrangement(s) disclosed.

Findings from question 46

Table 11: Disclosures on question 46, 2024–25

Question 46	2024–25
Hybrid payer recognised in respect of the payments made under the arrangements (subcategory 1)	24
Hybrid payer not recognised based on interpretation that is inconsistent with the Commissioner's view outlined in TD 2024/4 (subcategory 2)	18
Hybrid payer not recognised based on other reasons (subcategory 3)	29
Not disclosed	4
Total	75

There were 67 taxpayers that disclosed 75 arrangements in the first year of reporting at question 46. The breakdown of subcategories shows:

• A total of 24 disclosures (32%) reported under subcategory 1, stating that the taxpayer has followed the ATO view outlined in TD 2024/4 and recognised a 'hybrid payer' in respect of their arrangements.
• A total of 18 disclosures (24%) were reported under subcategory 2, representing taxpayers that adopted a contrary position to TD 2024/4. We consider these disclosures high risk. Of these high risk disclosures, 5 have been or are in the process of being reviewed. The remaining 13 disclosures will be considered as part of our compliance and assurance programs.
• A further 29 disclosures (39%) reported under subcategory 3 that the relevant Division 832 control group entity was not a hybrid payer in respect of the payments made under the arrangements based on other reasons not covered by TD 2024/4.
• We have identified a small number of taxpayers that may have mischaracterised their self-assessed rating as subcategory 3 instead of subcategory 1. However, these taxpayers have provided a comprehensive explanation of their arrangements which demonstrates there is limited risk with the arrangements identified.
• The remaining 4 disclosures did not disclose a subcategory for their arrangements. We consider these disclosures to be high risk.
• We continue to monitor these arrangements and may review them under our compliance and assurance programs.

All other taxpayer alert and other questions

The following questions relate to taxpayer alerts that involve either nil disclosure or a small number of disclosures that don't fit within an earlier grouping. Accordingly, we have provided the information in a single table form.

Other information such as CBC and IDS are also used to understand and support disclosures.

Disclosures for all other questions

Table 12: Disclosures on all other questions, 2022–23 to 2024–25

Question	Topic	Taxpayer alert	2022–23	2023–24	2024–25
3	Bifurcated procurement hubs	TA 2015/5	4	3	2
21	Unamended mistakes or omissions made in the income tax return	Other	28	37	35
26	MEC group and CGT assets	TA 2019/1	1	1	1
34	Interposed entities to avoid withholding tax	TA 2020/3	1	0	0
35	MEC groups	TA 2020/4	6	6	6
36	Derivative instruments	TA 2020/5	0	0	0
41	Treaty shopping	TA 2022/2	1	1	1
42	Treatment of global intangible low-taxed income as subject to foreign income tax in the US for the purpose of the hybrid mismatch rules in Division 832 of the ITAA 1997.	TD 2022/9	7	7	2