In this third episode of Tax Chats (International Tax 101), Danielle explores the definition of a Significant Global Entities (SGEs), including its expansion in 2020 (which mostly impacted private equity backed taxpayers) and some of the additional risks that they can be exposed to.

These risks include:

1. Significantly higher ATO late filing penalties which are 500x higher than other taxpayers (i.e. a filing one day late would cost $156,500), which are seeing the ATO pursue more over the last few months;
2. Additional compliance filings – some SGEs (which are also considered a Country-by-Country Reporting Entity) will have additional compliance requirements - most notably the lodgement of General Purpose Financial Statements (GPFS) under Section 3CA of the TAA and Country-by-Country reporting under Subdivision 815-E of the ITAA 1997); and
3. Additional anti-avoidance measures including Diverted Profits Tax (DPT) and the Multinational Anti-avoidance Law (MAAL)

Finally, Danielle provides some practical tips on how you can help manage these risk for your clients. 

In this ten-part series, Danielle will be providing you with a quick and practical update on some topical international tax issues. These updates are designed to help you (or your clients) identify and understand the potential international tax and transfer pricing risks before any ATO review activity.

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