New reporting obligations for Significant Global Entities

By Howard Badger - November 6, 2017

In an era of increased tax transparency demanded by tax jurisdictions across the globe, the Australian government has introduced the concept of “Significant Global Entities” (SGE) who are required to meet increased reporting obligations with the Australian Taxation Office (ATO).

An Australian entity satisfying the definition of SGE is required to meet the following lodgement requirements with the ATO:

  • Country-by-country (CbC) reporting
  • General purpose financial statements

Significant penalties up to $525,000 can be imposed by the ATO to taxpayers not meeting each of these lodgement requirements by their respective due date.

What is a SGE?

An entity is a SGE for an income year if it is:

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

Annual global income is determined in accordance with commercially accepted accounting principles (CAAP).  As such, an Australian entity that is equity accounted by a foreign entity will not have the foreign entity’s annual global turnover taken into account in assessing its SGE status.

CbC reporting

For more information on CbC reporting obligations of a SGE, please refer to our newsletter published on 20 February 2017.

Importantly, Australian SGEs with a year end of 31 December will have their first Australian CbC reporting lodgement due on 15 February 2018.

Summary of GPFS reporting requirement for SGEs

Who will be subject to the SGE GPFS reporting requirement?

Companies who:

  • Are an SGE (global group income ≥ A$1 billion).
  • Are an Australian tax resident, or foreign resident that operates an Australian permanent establishment.
  • File an Australian income tax return.
  • Do not already file GPFS with ASIC.

Which income year does this reporting requirement commence?

Income years starting on or after 1 July 2016.  As such, the first financial year affected will be:

  • For June year-end taxpayers: Year ended 30 June 2017
  • For September year-end taxpayers: Year ended 31 September 2017
  • For December year-end taxpayers: Year ended 31 December 2017
  • For March year-end taxpayers: Year ended 31 March 2018

In accordance with Australian Accounting Standard (AAS), comparative information may also need to be prepared for the prior year.

When is the lodgement due date?

  • On or before the date when the entity is required to lodge its Australian income tax return.
  • As such, the first affected taxpayers will be those with income year ended on 30 June 2017.  In which case, their lodgement due date is most likely to fall on 15 January 2018.
  • However, lodgement concession applies to the first GPFS lodgement for taxpayers whose income year ended on 30 June 2017 only.  These taxpayers have until 31 March 2018 to lodge their GPFS.  This concession applies automatically and do not need to be applied.
  • It is also possible for an entity to have an even earlier lodgement deadline that might even precede the ATO’s guidance released on 28 September 2017.  For instance, entity incorporated after 30 June 2016 with a 31 September 16, 31 December 16 or 31 March 2017 year end.

Transitional administrative provisions?

  • Yes, transitional administrative provisions will apply to the first GPFS reporting income year for the majority of affected taxpayers.  Refer below for more details.

Audit requirement for the GPFS?

  • There is currently no audit requirement for the GPFS.
  • However, the entity should retain reliable evidence to demonstrate the GPFS is properly prepared in accordance with AAS or CAAP as applicable (in which case, audited financials will most likely be the strongest evidence).

Consultation ongoing?

  • Yes, the next round of SGEs GPFS reporting requirement is currently ongoing and will close on 27 October 2017.
  • The current consultation focuses on whether foreign parent entity’s GPFS prepared under a CAAP other than AAS can be lodged by the Australian subsidiary in satisfaction of its GPFS lodgement requirement in Australia.

Penalties for late lodgement?

Yes, penalties apply in addition to any other penalties imposed under the Corporations Act and varies depending on the number of days late:

  • 28 days or less:            $105,000
  • 29 to 56 days:              $210,000
  • 57 to 84 days:              $315,000
  • 85 to 112 days:            $420,000
  • More than 112 days:  $525,000

Summary of ongoing lodgement requirement (varies based on existing financial reporting obligation with ASIC)


Type of entity

Obligation under section 3CA



Entities that file a GPFS with ASIC within the due date.


  • The ATO will provide administrative relief if notified of late lodgement with ASIC when this precedes the due date of tax return lodgement (i.e. no separate lodgement with the ATO is required).


Entities that:

  1. Are required to lodge GPFS with ASIC but do not;
  2. File SPFS with ASIC;
  3. Are required to prepare but not lodge GPFS with ASIC (e.g. grandfathered large proprietary companies); or
  4. Are relieved from filing a GPFS with ASIC because the Australian parent files consolidated financial statements prepared in accordance with AAS.

Must provide a GPFS prepared in accordance with AAS.

  • Entities must provide GPFS using Tier 1 if they are “publicly accountable”.
  • All other entities may prepare Tier 2 reduced disclosure requirements.


Transitional administrative approach available for the first GPFS reporting income year for this category of entities (refer below).


Entities that are Australian tax residents and are:

  1. Not subject to the Corporations Act (e.g. corporate limited partnerships);
  2. Not subject to Part 2M.3 of the Corporations Act (e.g. certain small proprietary companies); or
  3. Relived from preparing financial statements because their foreign parent files consolidated financial statement with ASIC prepared in accordance with the home country’s CAAP.

Provide GPFS (standalone or consolidated) prepared in accordance with AAS or other CAAP (where AAS don’t apply to the taxpayer).

  • The ATO has confirmed IFRS or accounting standards that are IFRS compliant, such as AAS and US GAAP are globally recognised CAAP.
  • However, it is not clear whether other accounting standards such as CAS, would be considered to be a CAAP.


Entities that are foreign resident operating a permanent establishment in Australia and did not lodge a GPFS with ASIC (e.g. registered foreign companies).

In most circumstances, the entity is required to lodge a GPFS prepared in accordance with AAS or CAAP (both accepted).

  • GPFS cannot be standalone but the ATO encourages separate disclosures for the Australian PE in the GPFS.
  • GPFS denominated in a foreign currency does not require translation to AUD.

Summary of transitional administrative approach

Who will be eligible for the transitional administrative approach?

Entities who:

  • Are covered under scenario 2 of the table above.
  • Choose not to lodge a standalone GPFS or GPFS consolidating just the Australian members of the consolidated group.

When does the transitional approach applies?

The first GPFS reporting income year.

What is the transitional approach?

The eligible entity can lodge a GPFS that relates to it that is prepared under other CAAP.

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