Australia extends lodgement date of Country-by-Country reporting, Master File and Local File, is your Company prepared?

Australia extends lodgement date of Country-by-Country reporting, Master File and Local File, is your Company prepared?

The deadline for ‘Significant Global Entities’ (SGEs) to lodge Country-by-Country (CbC) reporting statements has been extended until 15 February 2018. The CbC reporting statements comprise the Master file, Local file, and CbC report. This is great news for December balancers that have prepared or are in the process of completing the Local Files but require more time for their headquarters to finalise the CbC reporting statements.

Our firm has the experience and relevant tools for assisting SGEs (Head offices and Subsidiaries) to prepare, review and lodge Master File, Local File and CbC reporting. If you need assistance contact our team members.

Is your Company a Significant Global Entity (“SGE”)?

CbC reporting applies to particular types of SGE. An entity is an SGE for an income year if it is:

  • a global parent entity with annual global income of A$1 billion or more, or
  • a member of a group of entities consolidated (for accounting purposes), where the global parent entity has an annual global income of A$1 billion or more.

What is the Australian Local File?

Australia implemented a Local File that is substantially different to the Local File proposed by the OECD in Chapter V of the OECD Guidelines. The Australian Local File contains more information that the OECD Local File and is intended to be an additional ‘form’ with disclosures similar to the Tax Return disclosures in the International Dealings Schedule.  For this reason, taxpayers need local assistance with completing and submitting the Local File in Australia.

Australia’s Local File comprises a short-form Local File, Local File part A and Local File part B. The three Sections need to be completed by taxpayers unless they are eligible to complete the short form Local File Only.

Is my Company eligible for completing the Short Form File only?

A reporting entity is required to provide a short-form local file only to the ATO if it meets at least one of the following criteria:

  • the aggregate value of its international related party dealings (“IRPDs”) is less than $2 million, and it has no IRPDs on the short-form exceptions list;
  • the simplified transfer pricing record-keeping criteria for small taxpayers applies and it has no IRPDs on the short-form exceptions list;
  • the simplified transfer pricing record-keeping criteria for materiality applies and it has no IRPDs on the short-form exceptions list.

The short-form exceptions list includes transactions as follows:

  • Derivative transactions
  • Assignment licenses and other transactions involving IPs
  • IRPDs of a capital nature

Electronic lodgement

The CbC statements including Master File and Local File need to be in XML schema before electronic lodgement via one of these channels:

  • Business Portal using file transfer facility
  • Tax Agent Portal using file transfer facility
  • Standard Business Reporting using SBR-enabled software

Penalties

Administrative penalties for statements and failure to lodge on time penalties have increased as of 1 July 2017 for SGEs. Failure to lodge tax documents including CbC statements on time will attract maximum potential penalties ranging from A$ 105,000 to A$ 525,000 (dependant on timing).

Questions?

Contact Transfer Pricing Solutions

Australia

+61 (3) 59117001
reception@transferpricingsolutions.com.au

Singapore

+65 31585806
services@transferpricingsolutions.asia

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