Significant Global Entities: Bracing for Steeper Penalties and a Wave of New Compliance Demands

02 February 2026

Significant Global Entities (SGEs) are subject to some of the most stringent compliance and reporting requirements in Australia. An SGE broadly includes any member of an accounting consolidated group with global turnover of AUD $1 billion or more. The definition also extends to ‘notional listed company groups’, capturing entities that would be consolidated for accounting purposes if any member were a listed company, regardless of whether consolidated financial statements are actually prepared.

Heightened Penalties for Non-Compliance

SGEs face severe penalties for failure to lodge (FTL) tax documents on time. As of 1 July 2025, the Australian Taxation Office (ATO) has increased the penalty unit to $330. For SGEs, the penalty is 500 times the base penalty amount per late lodgement. The current penalty schedule is as follows:

Days Late	SGE Penalty (AUD)
28 or less	$165,000
29 to 56	$330,000
57 to 84	$495,000
85 to 112	$660,000
More than 112	$825,000

The penalty applies to each late lodgement, so robust internal processes are essential to avoid costly oversights.

Country-by-Country (CbC) Reporting and New Public Disclosure Requirement

SGEs must comply with three-tiered CbC reporting obligations:

Master File: Group-wide information.
Local File: Details of local transactions.
CbC Report: High-level data on global income, taxes, and economic activity.

A major new requirement for 2025 is the introduction of public CbC reporting. SGEs will now be required to publicly disclose certain tax information on a country-by-country basis, including a statement on their approach to taxation. This information will be published by the ATO, increasing transparency and public scrutiny of multinational tax practices.

Other Key Obligations

General Purpose Financial Statements (GPFS): SGEs must lodge GPFS with the ATO by the income tax return due date, unless already lodged with Australian Securities and Investments Commission (ASIC).
Reportable Tax Position (RTP) Schedule: Required for entities with significant Australian business income, covering uncertain tax positions and arrangements flagged by the ATO.
OECD Pillar 2 Rules: Australia has enacted the global and domestic minimum tax regime effective from 1 January 2024. Multinational groups within scope that have an Australian subsidiary will be required to lodge Global Data with the ATO, with the first submissions due as early as 30 June 2026. SW Australia has developed software to assist with Pillar Two implementation and compliance.

Conclusion

With increased penalties and new public reporting requirements, SGEs must ensure their compliance frameworks are up to date. Early preparation, clear internal communication, and proactive engagement with tax advisors are critical to managing these evolving obligations.

Contributor(s):

Daren Yeoh
Partner, Tax
SW Australia
E: dyeoh@sw-au.com