Both Houses of Federal Parliament passed legislation late last year which will see some large companies have general purpose financial statements placed on public record from 1 July 2016.
Companies with a turnover above $100million will now have placed on public record their ABN, taxable income and tax paid. This also applies to a member of a wholly-owned group that has a foreign resident ultimate holding company, and entities where the foreign shareholding in the entity is more than 50%. Companies above $200 million that are Australian resident private companies for Australian income tax purposes will be exempt from this reporting. The changes will apply in respect of the tax data of 2013-14 and subsequent years.
Financial Reporting for some corporate tax entities will also be affected by the changes to the Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015. Should an entity have not lodged a general purpose financial statement with ASIC by the lodgement deadline, they must lodge one with the ATO on or before its income tax return lodgement deadline.
The corporate tax entities affected are those that are a "significant global entity" for the income year and either an Australian resident or a foreign resident that operates an Australian permanent establishment. The general purpose financial statement lodged with the ATO must be prepared in accordance with "the accounting principles" or if they do not apply, "commercially accepted principles relating to accounting".
The ATO will be required to forward the general purpose financial statement for these entities to ASIC. The receipt by ASIC is deemed to be lodgement of the document, therefore avoiding the need for the entity to make two lodgements, but ensures that the general purpose statements appear on the searchable public record. Reporting lodgement laws commence for income years beginning 1 July 2016.
The changes effectively mean that the current exercise of applying professional judgement on a reporting entity status has been thrown out the window in respect of the affected large entities.
Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.