About Public CBC reporting parents
The reporting obligation for Public CBC rests with the global parent entity, known as the Public CBC reporting parent, whether located overseas or in Australia.
An Australian subsidiary of a foreign entity does not generally have its own Public CBC reporting obligation. One exception is where a foreign entity doesn't include the Australian subsidiary in its group’s consolidated accounts, and the Australian subsidiary qualifies as a Public CBC reporting parent in its own right.
Criteria for a Public CBC reporting parent
The Public CBC reporting regime applies to certain CBC reporting entities that meet specific criteria.
You are a Public CBC reporting parent if all of the following apply:
- you are not an individual
- you are a member of a CBC reporting group at the end of the period, and you are not controlled by any other member of the CBC reporting group at the end of the period
- your annual global income for the reporting period is $1 billion or more.
And, for the relevant reporting period, all of the following must also apply:
- you were a CBC reporting parent for a period that includes the whole or a part of the preceding reporting period
- you were a member of a CBC reporting group at any time during the reporting period
- you were
- a constitutional corporation
- a trust, provided each of your trustees is a constitutional corporation
- a partnership, provided each of your partners is a constitutional corporation
- at any point during the reporting period
- you, or a member of your CBC reporting group was an Australian resident, or
- you have a foreign resident operating a permanent establishment in Australia
- $10 million or more of your aggregated turnover for the reporting period was Australian-sourced
- you have not received a notice from the Commissioner confirming that you are exempt
- you have not received a Government Related Entity (GRE) exclusion.
CBC reporting group
The following entities are member entities of the CBC reporting group:
- if the CBC reporting parent is the head entity of a consolidated group for accounting purposes
- all member entities of that consolidated group
- otherwise the members of the notional listed company group of the CBC reporting parent
- if the CBC reporting parent was taken to be the head of a consolidated group to which the accounting standards applied, all member entities of that group.
Reporting period
Reporting periods begin on 1 July 2024.
Public CBC reports are due within 12 months of the end of the reporting period.
Your reporting period is generally the period for which you prepare audited consolidated financial statements (or would prepare them if you were required to do so):
- For a Public CBC reporting parent with a reporting period ending 30 June, this will be from 1 July 2024, with the first report for the 2025 reporting period ending on 30 June 2025 due by 30 June 2026.
- If a Public CBC reporting parent's reporting period doesn't end on 30 June, reporting will apply from the start of the first period beginning after 1 July 2024. For example, a reporting period from 1 April to 31 March will first be subject to reporting from 1 April 2025 to 31 March 2026, with the report due by 31 March 2027.
Constitutional corporation
For the purposes of Public CBC reporting, a constitutional corporation is:
- a trading corporation formed within Australia (i.e. sells goods or services)
- a financial corporation formed within Australia (i.e. lending or investing activities)
- a corporation formed outside Australia (foreign corporation).
Under Australian law, a corporation is an entity with status as an artificial person; it has its own capacities, rights and liabilities which are distinct from those of its members.
Foreign corporations are legal entities formed under the law of a foreign country and given a corporate legal personality by that law or by Australian law. They have also been described as 'entities on which legal personality has been conferred or recognised under other legal systems' or 'corporations formed outside the limits of the Commonwealth'.
Whether an entity formed in another jurisdiction is a constitutional corporation for Public CBC purposes is a question of fact that must be determined based on its particular circumstances. This involves considering the entity’s legal form and characteristics, with attention to its substance rather than labels applied under foreign law.
Ownership or control arrangements, including government ownership or status as a body politic, do not, on their own, determine whether an entity is a constitutional corporation. Instead, all relevant features of the entity must be considered in assessing whether it meets the definition.
$10 million aggregated turnover
This financial criterion is separate to the requirement that the group has $1 billion or more in annual global income for the reporting period. This means if the Public CBC reporting group's Australian-sourced aggregated turnover is less than $10 million, it falls outside the Public CBC reporting regime.
The criterion focuses specifically on Australian-sourced income and ensures groups without a meaningful economic presence in Australia are not subject to these reporting obligations.
The aggregated turnover for a reporting period is the annual turnover for the Public CBC reporting parent and the annual turnover for the entities it is connected or affiliated with, less income arising from certain transactions between connected and affiliated entities.
The entities included in the $10 million Australian-sourced aggregated turnover test may differ from those in the Public CBC reporting group, as different grouping rules apply.
Aggregated turnover
Aggregated turnover is calculated for an entity's income year.
Where your reporting period isn't an income year, you must assume your reporting period is an income year for the purposes of calculating the aggregated turnover.
Aggregated turnover for an income year is the total ordinary income that is derived in the income year in the ordinary course of carrying on a business.
Ordinary income is broader than taxable income – it also encompasses exempt income and non-assessable non-exempt (NANE) income.
For further information on carrying on a business Taxation Ruling TR 2019/1 Income Tax: when does a company carry on a business?
The Commissioner's guidance on aggregated turnover also applies to Public CBC reporting, for example Taxation Determinations:
- TD 2022/5 Income tax: aggregated turnover – application of the 'connected with' concept to corporate limited partnerships, and
- TD 2022/7 Income tax: aggregated turnover – application of the 'connected with' concept to partnerships, foreign hybrids and non-entity joint ventures.
Australian-sourced
Australian-sourced takes its meaning from existing Australian tax concepts. Whether income is Australian-sourced will depend on the facts and circumstances for each entity. No one factor is determinative, but a nexus to the Australian economy is required. Australian sourced income includes both:
- ordinary income derived by Australian resident entities
- ordinary income with an Australian source derived by foreign resident entities.
Examples of ordinary income with an Australian source derived by foreign resident entities include dividend income or interest income paid by an Australian resident company.
For further information see Taxation Determination TD 2011/24 Income tax: is an 'Australian source' in subsection 6-5(3) of the Income Tax Assessment Act 1997 dependent solely on where purchase and sale contracts are executed in respect of the sale of shares in an Australian corporate group acquired in a leveraged buyout by a private equity fund?.