Overview of Draft PSLA 2025/D1

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Overview of Draft PSLA 2025/D1Australian Public Country-by-Country reporting exemptions October 2025

Key Aspects of Draft PSLA 2025/D1

Under the regime, the parent entity generally has the

On the 3rd of July 2025, the Australian Taxation Office

for who is required to report, along with the associated

(ATO) published Draft Law Administration Practice

reporting obligations.

reporting obligation, rather than the Australian subsidiary (Public CBC reporting parent). Below are the criteria

Statement (PSLA) PSLA 2025/D1 – Public Country-byCountry Reporting Exemptions.

Criteria

Details

This draft PSLA sets out:

Reporting Obligation

Entity must report if all of the following apply:

• the key factors the Commissioner will consider when

• it is a CBC reporting parent for the preceding period

exercising discretion to grant a full or partial exemption from public country-by-country reporting (PCbCR) for an income year;

• it is an entity of the type specified

• the process for lodging an application for exemption;

• it satisfies the requirements for that reporting period.

and • the information that should be included in an exemption application

Specified Entity Type

One of the following:

Background

• Constitutional corporation (i.e. a foreign corporation)

The PCbCR measures apply to certain entities operating

• Trust (all trustees are constitutional corporations)

in Australia, requiring them to publicly disclose specified tax and other information on a jurisdiction-by-jurisdiction basis. For jurisdictions outside Australia and certain

• Partnership (all partners are constitutional corporations)

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. pitcher.com.au

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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

multinational tax transparency rules which are aligned with, but intentionally distinct from, comparable regimes (e.g., the EU’s).

Registration Form and Instructions

• Member of a CBC reporting group during the period

On the 12th June 2025, the ATO released detailed

• Entity or group member is an Australian resident or has an Australian permanent establishment

together with the required registration form. The form

• $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

These measures reflect Australia’s adoption of enhanced

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

instructions for registering under the Public CbCR regime, 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 As discussed in the Explanatory Memorandum accompanying the legislation, in exercising this discretion,

Reporting Obligations

the Commissioner may consider whether public disclosure would:

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

pitcher.com.au

Impact on National Security

Breach of Australian Law

Breaching the laws of another jurisdiction

Revealing commercially sensitive information Public CBC threshold in other jurisdictions

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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

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

accessible, or can be reasonably inferred from sources

An exemption application on the basis that public

such as financial statements, stock exchange filings,

disclosure of the information breaches an Australian

litigation documents, freedom of information disclosures,

law must specify the relevant law and the particular

or similar public domain materials.

reporting obligation and explain how the disclosure of that

Exemption Categories 1

information breaches that law.

Exemption 1: National security

Exemption 3: Breach of law of another jurisdiction In considering an exemption request on the basis that

The draft PSLA states that Australian law defines “national

public disclosure would breach the laws of another

security” as Australia’s defence, security, international

jurisdiction, the draft PSLA states that consideration

relations, or law enforcement interest. The national

will be given to whether the foreign law was designed,

security of other jurisdictions may also be a relevant

in substance or effect, to frustrate the operation of

security concern. International relations are defined as

Australia’s public CbC reporting regime. Where this is

the political, military, and economic relations with foreign

the case, the ATO may view such laws as diminishing the

governments and international organisations.

credibility of the claimed exceptional circumstances and

pitcher.com.au

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inconsistent with Parliament’s clear intent to improve

scope of their ‘home’ public CBC regime in that reporting

multinational tax transparency.

period, but by virtue of exchange rate fluctuation they are

Exemption 4: Commercial sensitivity

within Australia’s regime that period.

In limited circumstances, an exemption may be granted

Pitcher Partners Observation

where the required disclosure includes commercially

The ATO is expected to release the final PSLA once the

sensitive information, and public release of such

consultation process concludes (not anticipated before

information would result in severe consequences for the

October 2025). In parallel, guidance on the approved

entity, assessed objectively.

lodgement form is being developed and is also expected

Commercially sensitive information is information which

to be released later in 2025. Information disclosed under

would undermine or disadvantage a business or entity if

the Public Country-by-Country Reporting regime will be

shared.

made publicly accessible via an Australian Government

Factors indicating that information is commercially

website, with the first publication planned for late 2026.

sensitive include:

Although this ATO’s draft PSLA 2025/D1 exemption

• the nature of the information;

guidance provides valuable insight, it clearly indicates

• 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

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.

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 pitcher.com.au

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Let’s Talk If you’d like to further discuss Draft PSLA 2025/D1 and how it might affect you, please get in touch with our team.

Simon Chun Partner p +61 7 3222 8447 e schun@pitcherpartners.com.au

Murugesh Sheekar Tax Director p +61 7 3222 8332 e msheekar@pitcherpartners.com.au

Adelaide | Brisbane | Melbourne | Newcastle | Perth | Sydney

Pitcher Partners is an association of independent firms. An Independent Queensland Partnership ABN 84 797 724 539.

Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.

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