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Australia outlines a public CbCR strategy

The Australian government unveiled plans for public country-by-country reporting, prompting calls for a larger windfall tax.

On Tuesday, October 25, Treasurer Jim Chalmers presented Australia's "mini-budget," which featured public country-by-country reporting, new thin capitalization regulations, and stricter tax deduction rules.

Under proposed thin capitalization regulations, the Australian government aims to cap a company's debt-related deductions at 30% of earnings before interest, taxes, deductions, and amortizations. These regulations maintain the arm's length debt standard while allowing deductions for a portion of earnings on net interest expenses for the entire group.

Additionally, the mini-budget includes tougher limits for intangible asset deductions in low-tax countries with corporation tax rates under 15% or with a preferential patent box regime.

If adopted, all of these modifications will be applicable to business organizations in tax years beginning on July 1, 2023. In May 2023, the following budget announcement is expected. It will emphasize tax increases, according to local experts.



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