ATO opens consultation on public CbC exemption rules
The Tax Office has opened public consultation to inform its exemption rules for its public country-by-country reporting scheme.
On Tuesday, the ATO released its draft practice statement law administration (PSLA) on public CbC reporting exemptions.
The PSLA said that companies may apply for CbC reporting exemptions on any ground, as long as they could prove that public disclosure would cause particular harm.
“There must be something unusual or different to take the subject of the exemption out of the ordinary course,” it said.
“This may be particular harm or consequences caused by public disclosure (to the applicant or another party), which is disproportionate to the transparency intent (and not already considered by parliament).”
The ATO’s CbC reporting scheme has been designed to provide more granular information to the public on multinationals’ business operations, enabling greater scrutiny of multinational tax avoidance schemes.
The Tax Office recognised that there would be instances where public disclosure of information could be detrimental to a business, for reasons beyond transparency and accountability.
As such, the ATO said it would grant partial or full public disclosure exemptions for businesses under certain exceptional circumstances.
National security, breaches of Australian or international law, or revealing commercially sensitive information were all listed as situations that could justify an exemption from public disclosure.
However, the Tax Office reiterated that exemptions would not be granted lightly and must not undermine the original purpose of the public CbC reporting scheme.
“The result of granting exemptions should not undermine the transparency and accountability aims of this disclosure regime, the integrity of the tax system, nor the public's trust in the Commissioner's administration and stewardship of the system,” it said.
While legal breaches in foreign jurisdictions would be grounds for an exemption from the public reporting scheme, the ATO reiterated it would consider each case holistically, including whether a certain foreign law was introduced to skirt the ATO’s tax transparency regime.
“A factor in favour of granting a reporting exemption is if public disclosure of the information breaches the law of another jurisdiction,” the Tax Office said.
“However, you must take into account whether the design of that foreign law may have been to frustrate the operation of Australia's Public CBC reporting regime. Such a purpose would detract from whether exceptional circumstances genuinely exist to deviate from parliament's intention to enhance multinational transparency.”
Public consultation seeking feedback on the CbC exemption rules will be open until 5 September 2025.
The ATO also said it would host virtual consultation meetings on CbC exemptions on 7 and 22 August 2025 for further public feedback on the exemption rules.
