New general purpose financial statements: ATO consultation to start soon

New GPFS requirements: ATO consultation

Jenny Wong looks back at some key issues surrounding the new GPFS legislation, ahead of the imminent Australian Taxation Office (ATO) consultation process.

Director, Tax

KPMG Australia


Related content

Files stacked on a wooden surface

Now that the caretaker period is over, the ATO’s recent notice that they will commence consultation with external stakeholders on the administrative arrangements for the provision of general purpose financial statements (GPFS) prompted me to refresh my own memory of the issues we identified last year with the new legislation, the specific amendments and passage of which were facilitated by the Senate. 

This legislation requires corporate tax entities that are ‘significant global entities’ to give the Commissioner of Taxation a GPFR if they do not lodge one with the Australian Securities and Investments Commission (ASIC). This amendment will impact all Australian companies and not just Australian subsidiaries of multinational groups. This will potentially impact entities that previously only prepared special purposes financial statements or are relieved to prepare or lodging financial statements.

The new requirement to prepare and lodge GPFSs applies to an entity that is a significant global entity and this is an entity that is a global parent entity with an annual global income of A$1 billion or more; a member of a group of entities consolidated for accounting purposes and one of the other group members is a global parent entity with an annual global income of A$1 billion or more.

The financial statements must be for the financial year that most closely corresponds to the income year and it must be given to the Commissioner by the time the entity is required to lodge its income tax return. The amendment applies to income years commencing on or after 1 July 2016.

There are quite a few fundamental issues that need clarity to enable taxpayers implement these new requirements:

  • How is ‘A$1 annual billion global income’ determined?
  • Will it be as defined by the accounting standards as it’s not defined in the tax legislation?
  • Which accounts do you lodge for Australian subsidiaries of foreign parent entities?
  • Can the GPFR be Tier 2 reduced disclosure requirements?
  • How does the new tax law requirement interact with the existing requirements of the Corporations Act that relieves certain entities from lodging accounts with ASIC?
  • Do the GPFR under the new tax law requirement need to be audited?

We can expect an ATO discussion paper to be released for comment on the ATO’s website in the week commencing 15 August 2016. The consultation period is expected to close on 30 September 2016. You should engage with your KPMG Tax Advisor if you are affected, to determine if you are affected, implementation issues given your particular group structure and when you need to lodge your first set of GPFR with the ATO.

Tax Insights

KPMG Australia's analysis of tax issues and developments.

Read more

Corporate Tax Advisory

Corporate Tax Advisory

KPMG’s Corporate Tax Advisory can help businesses understand corporate taxation matters and unlock value for organisations.

Connect with us


Request for proposal



KPMG's new digital platform

KPMG's new digital platform