New financial reporting requirement in Australia
FINANCIAL REPORTING INSIGHTS |
The Australian Tax Office (ATO) recently introduced new legislation, which will have considerable impact on subsidiary reporting requirements for international companies with an Australian subsidiary or operation. For each income year starting on or after July 1, 2016, a corporate tax entity that is a Significant Global Entity (SGE) with an Australian presence must provide General Purpose Financial Statements (GPFS) to the Commissioner of Taxation. This applies, regardless of the size of the subsidiary, and the only exemption is where GPFS have previously been provided to the Australian Securities and Investments Commission.
The purpose of the legislation is to improve tax transparency for certain multinational entities and large privately owned organizations. The Financial Insight prepared by RSM Australia sets out further details, including the criteria for determining whether a company is part of an SGE and is required to file GPFS. It is important to note that the ATO has introduced significant non-filing penalties for SGEs, which could go up to Australian Dollars $525,000 (approximately USD $389,000).