New reporting requirements to hit Aussie accounting firms

BDO urged Australian subsidiaries of foreign-owned multinational companies to communicate to their overseas head offices that they will need their assistance and support to comply with the new rules, including:

• Country-by-Country (CbC) reporting, which came into effect on 1 July 2016;

• The multinational anti-avoidance law (MAAL), which came into effect on 1 January 2016;

• The obligation to lodge general purpose financial statements with the ATO unless such statements have already been lodged with ASIC, for years commencing 1 July 2016 and later;

• The proposed diverted profits tax from 1 July 2017;

• The proposed increase in administrative penalties for late lodgement of documents and the doubling of the shortfall penalties for false or misleading statements from 1 July 2017.

“Many local Australian businesses that might be part of a larger global conglomerate may be unaware that if their parent company overseas is deemed a significant global entity then a raft of new reporting is required by the ATO,” said tax partner at BDO, Mark Molesworth.

“This is irrespective of the size of the Australian entity by itself – it could be quite small – but if its parent group meets the definition of a significant global entity, it will mean that the Australian entity has to ensure that it complies with the new requirements,” he added.