2025/D1
On the 3rd of July 2025, the Australian Taxation Office (ATO) published Draft Law Administration Practice Statement (PSLA) PSLA 2025/D1 – Public Country-byCountry Reporting Exemptions.
This draft PSLA sets out:
• the key factors the Commissioner will consider when exercising discretion to grant a full or partial exemption from public country-by-country reporting (PCbCR) for an income year;
• the process for lodging an application for exemption; and
• the information that should be included in an exemption application
Background
The PCbCR measures apply to certain entities operating in Australia, requiring them to publicly disclose specified tax and other information on a jurisdiction-by-jurisdiction basis. For jurisdictions outside Australia and certain specified jurisdictions, disclosures may be made on an aggregated basis. Entities are also required to publish a statement on their approach to taxation and provide a list of group entities.
Under the regime, the parent entity generally has the reporting obligation, rather than the Australian subsidiary (Public CBC reporting parent). Below are the criteria for who is required to report, along with the associated reporting obligations.
Criteria Details
Reporting Obligation Entity must report if all of the following apply:
• it is a CBC reporting parent for the preceding period
• it is an entity of the type specified
• it satisfies the requirements for that reporting period.
Specified Entity Type One of the following:
• Constitutional corporation (i.e. a foreign corporation)
• Trust (all trustees are constitutional corporations)
• Partnership (all partners are constitutional corporations)
Meets Reporting Conditions Entity must report if all of the following apply:
• Was a CBC reporting parent for a period that includes the whole or a part of the preceding reporting period
• Member of a CBC reporting group during the period
• Entity or group member is an Australian resident or has an Australian permanent establishment
• $10 million or more of the entity’s aggregated turnover for the reporting period was Australian-sourced.
• Not a exempt entity
CBC Reporting Parent Definition Entity must report if all of the following apply:
• Not an individual
• Not controlled by another group member at period end
• Global income of AUD 1 billion or more
These measures reflect Australia’s adoption of enhanced multinational tax transparency rules which are aligned with, but intentionally distinct from, comparable regimes (e.g., the EU’s).
Registration Form and Instructions
On the 12th June 2025, the ATO released detailed instructions for registering under the Public CbCR regime, together with the required registration form. The form must be submitted via email and includes several key sections, including the option to nominate an authorised contact in Australia—such as the public officer of a local subsidiary or an appointed adviser.
Entities may also nominate an authorised tax agent to act on their behalf in communications with the ATO.
Registration is intended to streamline an entity’s administrative dealings with the ATO and may facilitate:
• Lodgement of the Public CbC report;
• Requests for extensions to the reporting deadline; and
• Applications for exemptions from reporting obligations.
Grounds for Exemption
Reporting Obligations
Obligation Details
Applicable Reporting Periods Commencing on or after 1 July 2024
Report Due Date Within 12 months after the end of the relevant period
Example: 30 June 2025 year end Lodgement due by 30 June 2026
Example 31 December 2025 year end Lodgement due by 31 December 2026
Exemption Application Requirement Must be submitted prior to the end of the income year of lodgement
As discussed in the Explanatory Memorandum accompanying the legislation, in exercising this discretion, the Commissioner may consider whether public disclosure would:
Impact on National Security
Breach of Australian Law
Breaching the laws of another jurisdiction
Revealing commercially sensitive information
Public CBC threshold in other jurisdictions
Principles to consider when assessing an exemption application
Exemptions will be granted only in rare and exceptional circumstances, and the ATO stresses that its discretion cannot undermine the regime’s core objectives: enhancing transparency, safeguarding the tax system’s integrity, and maintaining public confidence.
The draft PSLA notes that certain features of the regime were deliberately preserved during the legislative process, including the exclusion of private groups from exemption eligibility, the absence of legislative carve-outs for commercially sensitive information, and the unavailability of exemptions by self-assessment. Any divergence from other regimes, reflects intentional policy design. To qualify for an exemption, the applicant must demonstrate that the disclosure would result in materially adverse consequences—either to the applicant or another party—that are disproportionate to the intended transparency benefits and were not otherwise contemplated by Parliament.
Exemptions are unlikely to be granted where the information is already publicly available, readily accessible, or can be reasonably inferred from sources such as financial statements, stock exchange filings, litigation documents, freedom of information disclosures, or similar public domain materials.
Exemption Categories 1
Exemption 1: National security
The draft PSLA states that Australian law defines “national security” as Australia’s defence, security, international relations, or law enforcement interest. The national security of other jurisdictions may also be a relevant security concern. International relations are defined as the political, military, and economic relations with foreign governments and international organisations.
The following types of information, for example, are matters which the ATO would not expect to be publicly disclosed:
• information that could reveal where secret defence, intelligence, security, or law enforcement-related assets are placed around the world (by Australia or jurisdictions with whom Australia is allied or has cooperative relationships);
• information that could reveal where defence, intelligence, security, or law enforcement personnel or contractors have been placed, if that placement is secret or ongoing, as it may put them in danger; and
• information exposing contracts with Australian defence, intelligence, security, or law enforcement agencies upon which the Australian government has imposed strict secrecy requirements and has not publicly acknowledged, and which would not be sufficiently disguised by aggregation in the public CbC report. The fact that a CBC reporting group operates in or with the defence, intelligence, security or law enforcement industries or sectors is not likely sufficient, on its own, to warrant an exemption.
Exemption 2: Breach of Australian law
An exemption application on the basis that public disclosure of the information breaches an Australian law must specify the relevant law and the particular reporting obligation and explain how the disclosure of that information breaches that law.
Exemption 3: Breach of law of another jurisdiction
In considering an exemption request on the basis that public disclosure would breach the laws of another jurisdiction, the draft PSLA states that consideration will be given to whether the foreign law was designed, in substance or effect, to frustrate the operation of Australia’s public CbC reporting regime. Where this is the case, the ATO may view such laws as diminishing the credibility of the claimed exceptional circumstances and
inconsistent with Parliament’s clear intent to improve multinational tax transparency.
Exemption 4: Commercial sensitivity
In limited circumstances, an exemption may be granted where the required disclosure includes commercially sensitive information, and public release of such information would result in severe consequences for the entity, assessed objectively.
Commercially sensitive information is information which would undermine or disadvantage a business or entity if shared.
Factors indicating that information is commercially sensitive include:
• the nature of the information;
• the value or cost for its development;
• whether the information’s value would be diminished or destroyed by disclosure;
• its importance to the business; and
• measures taken to keep the information secret. The onus is on the applicant to substantiate the exemption request with clear reasoning and supporting evidence. A general assertion that PCBCR disclosures will enable competitors to reverse-engineer decisions or insights into the business will not likely be sufficient, whereas an explanation of how particular pieces of information could be used against the business will be more compelling.
Exemption 5: Public CBC threshold in other jurisdictions
The draft PSLA indicates that positive weight may be given to an exemption request where an entity, subject to a public CBC regime in their ‘home’ jurisdiction, is brought within the Australian regime merely due to fluctuations in foreign currencies and does not satisfy the revenue reporting threshold in any other public CBC regime globally for the reporting period. That is, if the applicant’s income is below the revenue reporting threshold in the parent entity’s jurisdiction and, accordingly, is not within
scope of their ‘home’ public CBC regime in that reporting period, but by virtue of exchange rate fluctuation they are within Australia’s regime that period.
Pitcher Partners Observation
The ATO is expected to release the final PSLA once the consultation process concludes (not anticipated before October 2025). In parallel, guidance on the approved lodgement form is being developed and is also expected to be released later in 2025. Information disclosed under the Public Country-by-Country Reporting regime will be made publicly accessible via an Australian Government website, with the first publication planned for late 2026. Although this ATO’s draft PSLA 2025/D1 exemption guidance provides valuable insight, it clearly indicates that exemptions will only be granted in exceptional circumstances, consistent with the intentional design of the disclosure framework. Arguments based solely on compliance burden or references to exemptions granted by other jurisdictions will not be sufficient. Exemption applications must be underpinned by robust, evidence-based justifications that align closely with the criteria outlined in the guidance. Entities considering an exemption should begin gathering relevant supporting evidence as early as practicable.
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