Consider CBCR notifications in the event of acquisition
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Consider CBCR notifications in the event of acquisition
Consider CBCR notifications in the event of acquisition
Mon 23 Dec 2019
There are a number of notification and reporting obligations for companies and groups within the country by country reporting (CBCR) regime.
There is an obligation for each UK entity (entity A) of a multinational enterprise (MNE) subject to CBCR to notify HMRC (where it is not the ultimate parent entity (UPE) of the MNE) of the entity that will file the CBCR report. If the UPE is a foreign entity, each UK entity must also notify HMRC of the jurisdiction in which that report will be filed. It will also need to notify HMRC of all of its constituent entities in the UK.
This notification must be filed before the end of the reporting period of the worldwide group to which the UK entity belongs. If another UK entity (entity B) has filed the information before the filing deadline, which includes the information in respect of entity A, entity A must still notify HMRC of that notification and the date it was filed.
Notification might be made part way through the year as a matter of course, after which a UK entity may be sold to another group which also has CBCR reporting requirements. The acquired entity will also have an obligation to notify in respect of the CBCR requirements of its new parent. If the old parent and the new parent have the same year end, this will mean two notifications for the same year (the results of entity A may be included in the consolidated results of both the old and the new parent for that year – for the period entity A was a member of the group).
There is a £300 penalty for not meeting the notification requirement, so please keep the notification requirement in mind for entities which change ownership in the year – whether acting for the entity being acquired, or the acquirer.
Mazars has a summary of CBCR and transfer pricing requirements round the world available here. Please get in touch with a member of the Mazars international tax team to discuss your CBCR and transfer pricing concerns.
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