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In brief

The Australian Federal Government is consulting on a new financial reporting requirement for public companies (listed and unlisted) to disclose information about their consolidated entities, including their country of tax domicile.

The change will apply in relation to financial years commencing from 1 July 2023. Submissions can be made until 13 April 2023.

Key takeaways

Under the proposal, a public company’s annual financial report will need to include either:

  • A “consolidated entity statement” disclosing details of each entity within the company’s consolidated group, including its name, entity type, place of incorporation and ownership percentage (if applicable), and countries of residency for tax purposes
  • A statement that the accounting standards do not require the company to prepare consolidated financial statements.

The directors’ declaration about the financial statements, and the CEO’s and CFO’s declarations for a listed company, will need to include an opinion that the consolidated entity statement is true and correct.

In depth

Under the proposed amendments, if the accounting standards require a public company to prepare financial statements in relation to a consolidated entity, the company’s consolidated entity statement must provide the following information for each entity within the consolidated entity at the end of the financial year:

  • The entity’s name
  • Whether the entity is a body corporate, partnership or trust, and whether it is a trustee of a trust within the consolidated entity, a partner in a partnership within the consolidated entity, or a participant in a joint venture within the consolidated entity
  • If the entity is a body corporate, where it was incorporated or formed and the percentage of its issued share capital (if any) held by the company
  • A list of each country in which the entity is a resident for tax purposes.

The proposal is part of the government’s broader multinational tax integrity package, other elements of which have been and will be consulted on separately. According to the explanatory materials, “The intent is that increased public disclosures will lead to enhanced scrutiny on companies’ arrangements … the expectation is that more information in the public domain will help to encourage behavioural change in terms of how companies view their tax obligations, including their approach to tax governance practices, decision making around aggressive tax planning strategies and potential simplification of group structures. The reporting of a company’s subsidiary information would be in line with international approaches to enhanced corporate tax transparency, such as that of the UK.”

Further details, including information on how to make a submission (by 13 April 2023), are available on the Treasury consultation page here.

Please contact us to discuss how this proposal might affect your company.


Richard Lustig — a partner in the Firm’s Melbourne office — is the Australian head of mergers and acquisitions and has 30 years experience in acting for bidders and targets. Richard focuses on public mergers and acquisitions including takeovers and schemes of arrangements, as well as initial public offerings and capital raisings. Richard is recognized as a leading recommended lawyer by Chambers Global, APL500, Chambers Asia Pacific, Best Lawyers in Australia, Doyles and IFLR. Chambers Global recognizes Richard's prominence in takeover transactions and those conducted by schemes of arrangement.

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