UK and International Tax news
OECD Issues CbCR Guidance
Wednesday 6th July 2016
The OECD has issued guidance on the implementation of Country by Country Reporting, as part of its BEPS project and Action 13 on Transfer Pricing Documentation and Country by Country Reporting.
Under CbC reporting, MNEs will be required to provide aggregate information annually, in each jurisdiction where they do business, relating to the global allocation of income and taxes paid, together with other indicators of the location of economic activity within the MNE group. It will also cover information about which entities do business in a particular jurisdiction and the business activities each entity engages in.
Following the endorsement of the BEPS Package by G20 Leaders in November, the focus has now shifted to ensuring a consistent implementation, including of the new transfer pricing reporting standards developed under Action 13 of the BEPS Action Plan. To that aim, the guidance covers the following:
– transitional filing options for MNEs that voluntarily file in the parent jurisdiction;
– the application of CbC reporting to investment funds;
– the application of CbC reporting to partnerships; and
– the impact of exchange rate fluctuations on the agreed EUR 750m filing threshold for MNE groups.
The OECD has indicated that it will continue to support the consistent and swift implementation of CbC reporting to ensure a level playing field, but also provide certainty for taxpayers and improve the ability of tax administrations to use CbC reports in their risk assessment work. Where additional questions of interpretation arise and would be best addressed through common guidance, the OECD will endeavour to make this available.
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