Significant Global Entity’ – change to definition – same $1b global turnover but wider group of ‘parent entities’ that can establish the ‘global’ group

The SGE definition identifies entities which are required to prepare Country-by-Country (CbC) reports and is used to determine entities which may be subject to Australia’s multinational tax integrity rules, such as the Multinational Anti-Avoidance Law (MAAL) and the Diverted Profits Tax (DPT).

The current definition applies only to an entity which is a member of a group headed by a public company or a private company required to provide consolidated financial statements. This is for the purpose of determining whether there is a global ‘group’ with more than A$1b in turnover. The changes to the definition will not change this turnover threshold.

The definition will be broadened to include members of large multinational groups headed by private companies, trusts and partnerships. It will also include members of groups headed by investment entities. This measure will also ensure the Commissioner’s power to determine an entity to be an SGE parent, so that the concept operates as intended.

The measure will apply to income years commencing on or after 1 July 2018. As this is a revenue protection measure, the revenue impact over the forward estimates is estimated to be nil.