Provision of general purpose financial statements by significant global entities
On 3 December 2015 the Senate amended the Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015External Link to require corporate tax entities that are significant global entities to give the Commissioner a general purpose financial statement if they do not lodge one with the Australian Securities and Investments Commission (ASIC). The financial statement must be for the financial year that most closely corresponds to the income year, and it must be given to the Commissioner by the time the entity is required to lodge its income tax return. The amendment applies to income years commencing on or after 1 July 2016 (for most taxpayers this means lodgment of the statement will not be required until early 2018).
An entity is a significant global entity if it is:
- a global parent entity with an annual global income of A$1 billion or more, or
- a member of a group of entities consolidated for accounting purposes and one of the other group members is a global parent entity with an annual global income of A$1 billion or more.
We can also make a determination that an entity is a significant global entity if, in the period where it has not prepared global financial statements, we believe its annual global income is A$1 billion or more.
The Bill, as amended, received royal assent on 11 December 2015.
In August 2016 we will commence consultation with external stakeholders on the administrative arrangements for the provision of general purpose financial statements by issuing a discussion paper. Stakeholders will be invited to provide feedback on the proposed arrangements, and to raise technical issues for our consideration. This will ensure we can implement the measure in a way that minimises compliance costs for affected entities.
The discussion paper will be released for comment on the ATO’s website in the week commencing 15 August. The consultation period is expected to close on 30 September 2016..
Legislation and supporting material
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The Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015, as amended, was enacted on 11 December 2015. As a result of amendments made to the Bill in the Senate, significant global entities have to provide general purpose financial statements to the Commissioner if they have not provided them to ASIC.