Automatic Country by Country Reporting Exemption

Significant global entities are required to prepare and submit a Country by Country ("CbC") report with the ATO pursuant to Sub-division 815-E unless an exemption is granted by the ATO. The ATO has released exemption guidance which states that an exemption is not automatially provided to entities that do not need to lodge an IDS (i.e entites that do not have cross border transactions > $2m). Instead, entities need to submit an exemption request which will be considered by the ATO. Given the objective of the CbC report is to idenity tax risk arising from cross border profit shifting, the absence of any material cross border dealings should be considered a low risk indicator and an exemption from the CbC reporting requirements should be automatically provided on this basis. The need to prepare and lodge an exeption request on a regular basis where there are no cross border dealings creates an administrative burdon for taxpayers and also additional work for the ATO. A practical solution that reduces process requirements for all stakeholders would be welcome.