Country by Country reporting (CBCR) extension to the location of taxes paid agreed by EU Parliament
Let’s Talk TaxInternational Tax Policy-Tax Transparency-Topical Tax
Country by Country reporting (CBCR) extension to the location of taxes paid agreed by EU Parliament
Country by Country reporting (CBCR) extension to the location of taxes paid agreed by EU Parliament
Tue 05 Nov 2019
The European Parliament agreed on 24 October that its member states should require multinationals to publicly report those countries in which their tax is paid (rather than just the aggregate tax paid). The EU press release indicates this will allow Member States to work on rules implementing this requirement.
This will be a further refinement to the requirements for Multinational reporting country by country information. Multinationals should be considering the implications of this change, and what if any action should be taken now.
Currently CBCR requires ‘constituent entities of a multinational group within the scope of CBCR, to report (amongst other things), taxes paid and taxes accrued in the jurisdiction in which they are tax resident. Branches and permanent establishments are required to report figures in the tax jurisdiction in which they are tax resident, rather than the tax jurisdiction of the entity of which they are a part.
The information and taxes paid that must be reported, is all the taxes paid by the constituent entity of that tax jurisdiction, regardless of which country that tax is paid to. Mazars Group has a section of its website dedicated to CBCR. Please get in touch with a member of the international tax team for a further discussion.
EU amended proposals for public country by country reporting (CBCR)
Background In its last month in office, the Maltese presidency of the EU has issued proposals for an amended directive on public disclosure of income tax information by certain undertakings and branches. This is part of the EU’s desire to enhance public scrutiny of corporate incomes taxes borne by multinational enterprises (MNEs) operating in the […]
Updated OECD guidance on country by country reporting (CBCR)
The OECD has released updated guidance on implementing CBCR. The changes in this updated guidance compared to previous versions are noted below. Updated guidance Consolidated revenue The guidance on the definition of consolidated group revenue (for determining whether the 750m threshold is met), already explained how to deal with differences in accounting rules of different […]
OECD Country by Country (CbC) Reporting News
The OECD has announced that more than 700 automatic exchange relationships have now been established among jurisdictions committed to exchanging CbC Reports as of 2018, including those between EU Member States under EU Council Directive 2016/881/EU. A full list of automatic exchange relationships that are now in place is available from an OECD spreadsheet. The UK has […]
Further CBCR guidance and resources on notification requirements
The OECD issued an announcement on 23 December 2019 concerning its updated country by country (CBCR) guidance – BEPS Action 13 to include responses to further questions concerning local filing requirements and obligations on exchange of information. It also published a spreadsheet summarising CBCR notification requirements of the various jurisdictions. There is also a spreadsheet […]
UK Country by country reporting (CBCR) and the notification obligation
Many groups may have already made their notifications to HMRC in respect of the first year for which CBCR reporting is required. Notification is an annual obligation in the UK and for those already in the first year of reporting under the regime, notification deadlines are fast approaching for the second reporting year. Notification must […]
Updated OECD CBCR guidance
The OECD has issued a September 2017 update to their guidance on country by country reporting (CBCR). In broad summary it contains further guidance on the following: Revenue – all revenue, gains income or other inflows included in the financial statements under applicable accounting rules that relate to profit & loss, should be aggregated and […]
Country by Country Reporting (CBCR) notifications
HMRC has updated its internal guidance on country by country reporting to include a preferred excel template for providing CBCR notifications. The HMRC guidance is also updated to say that HMRC’s online portal will validate a CBCR file before the option to submit is made and can therefore be used to test the validity of […]
OECD developments: CBCR and taxation of digital economy
The OECD has recently issued a consultation on country by country reporting (CBCR), and some analysis on the potential economic impact of its pillars 1 and 2 proposals for taxation of the digital economy (see here and here). Further details on these two news items are covered below. For a further discussion of CBCR requirements […]
Update to OECD country by country reporting (CBCR) guidelines
The OECD has updated its guidance on country by country reporting with respect to two areas. These changes should not affect the majority of enterprises subject to CBCR. Definition of total consolidated group revenue Clarification is provided that where an MNE group prepares consolidated financial statements using different accounting standards to those required for determining […]
Updated OECD guidance on country by country reporting (CBCR)
The OECD has included additional points in its September 2018 edition of guidance on country by country reporting (CBCR). The additional points cover the following areas: The treatment of dividends for the purposes of profit & loss before income tax, accrued income tax, and income tax paid (on a cash basis) for reporting in table […]
Public Country by Country Reporting- European Parliament approves directive
On 27 March 2019 the European Parliament adopted the proposal for a Directive on public CBCR reporting and proposed some amendments. This will require the European Parliament and European Commission to agree the text to take forward. The progress of this measure in the European administration, together with background information, can be found here. It […]
Updated OECD guidance on country by country reporting (CBCR) and common errors
The OECD has updated its guidance on CBCR (see here). The updated guidance includes new information on: The treatment of dividends Use of shortened or rounded amounts in table 1 Deemed listing provisions Information on short/long accounting periods Information on sources of data for table 3 Common errors by MNEs Local filing requirements There is […]
Consider CBCR notifications in the event of acquisition
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 […]
Upcoming UK corporation tax deadlines – CBCR, tax strategy publication, SAO, QIPs
Many companies have 31 December year ends and in addition to corporation tax return filing deadlines, it may be helpful to consider other upcoming UK tax reporting deadlines. Some of these are noted below. There may well be other deadlines to consider for tax purposes. For further advice on corporation tax matters, please get in […]
Different approaches on implementing CBCR taken by different jurisdictions
The OECD has released a report comparing different approaches taken by jurisdictions to implementing country by country reporting (CBCR). These differences arise because the OECD guidance provides the flexibility for jurisdictions to take different approaches. In particular, flexibility is provided over: Whether extraordinary income and gains from investment activities are required to be included in […]
Is taxation a poisoned chalice?
“Is the taxation a poisoned chalice?” That is what many told to Commissionaire Pierre Moscovici when he found out that President Juncker had given him the taxation portfolio. In the last eighteen months, the European Commission’s and OECD’s strong commitment has reshaped the international taxation landscape, has challenged the existing structures and transaction, and it […]
UK first to sign up to OECD’s Country by Country Reporting Proposals
Last week the UK government has confirmed that it will commit to implementing the country by country reporting template proposed by the OECD. The template is one of a number of measures being proposed by the OECD to tackle base erosion and profit shifting (BEPS). Under country by country reporting the ultimate parent entity of […]
Clamp down on avoidance by multinational groups
The Chancellor finally gave some more detail on his promise to tackle the techniques used by multinationals groups to shift profits offshore. This change will impact multinational groups like those which have been very publicly named and shamed in the press and by the Public Accounts Committee. However, it might also affect those groups whose […]
BEPS: The Global Fight against Tax Avoidance Continues
On 9-10 February 2015, the OECD presented the latest developments in the OECD/G20 project to combat BEPS by multinational enterprises during a G20 Finance Ministers and Central Bank Governors’ meeting in Istanbul, Turkey. In their Communiqué, the G20 Ministers and Central Bank Governors announced: “We reiterate our full support to the G20/OECD Base Erosion and […]
BEPS – Milestone: Multilateral Instrument to Address Tax Treaty-Related BEPS Concerns
The OECD reached a new milestone when the work on the development of the Multilateral Instrument to implement the tax treaty-related BEPS Action Plan began on 27 May 2015 in Paris. As per the OECD/G20 mandate, the ad hoc Group that will complete the work under Action 15 has been established, with over 80 countries […]
OECD BEPS- The 2015 Final Reports and the next step
On 5 October, the OECD has issued the Final Reports on the BEPS 15 Action points and it is expected that the G20 Finance Ministers will discuss and endorse the Reports and the recommended changes at their meeting on 8 October, in Lima, Peru. It is undeniable that the BEPS Action plan will dramatically reshape […]
Coca-Cola Case- Is it sweet enough?
On 17 September 2015, the Coca-Cola Company in the U.S. (“Coca-Cola U.S.”) received a statutory notice of deficiency (hereinafter “the notice”) from the Internal Revenue Service (“IRS”) for $3.3 billion U.S. Dollars (“USD”) excluding any interest for fiscal years 2007 to 2009. The notice claims that Coca-Cola U.S. should have earned an additional $9.4 billion […]
Country by Country Reporting Progresses with Multilateral Agreement
The OECD announced on 27 January 2016 that 31 countries have now signed Multilateral Competent Authority Agreement (MCAA) for the automatic exchange of Country-by-Country reports (CBCR). The use of a multilateral instrument enables certain changes to be introduced efficiently into bilateral treaties, without the need to amend each and every one individually. As such, the […]
Country-by-country reporting – regulations made
Following the release of the draft country-by-country (CbC) reporting regulations on 5 October 2015 for technical consultation, the final regulations The Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) Regulations 2016 SI 2016/237 have now been laid before Parliament. The background to these provisions is not restated here, but can be found in our earlier blogs, UK first […]
EU Member States agree to automatic exchange of information for country-by-county reporting
Agreement has been made between the EU Member States for the automatic exchange of information under the country-by-county (CbC) reporting framework. CbC reporting will require large multinational business to disclose certain financial information to tax authorities, analysing key financial information (including their revenue, profits and tax expense) between the jurisdictions within which they operate. Generally, it […]
The Panama Papers Database – Guilty until proven Innocent
On 9th May 2016 the International Consortium of Investigative Journalists (‘ICIJ’) undertook the next step in their release of the information obtained from the Panamanian law firm, Mossack Fonseca – the so-called Panama Papers – when they allowed public access to a searchable database that summarises the leaked information. The ICIJ website enables anyone to […]
BEPS amendments incorporated into OECD transfer pricing guidelines
The OECD announced on 15 June 2016, that on 23 May 2016, the OECD Council approved the amendments to the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (“Transfer Pricing Guidelines”), as set out in the 2015 BEPS Report on Actions 8-10 “Aligning Transfer Pricing Outcomes with Value Creation” and the 2015 BEPS Report […]
UK CBCR reporting update concerning foreign parented groups
UK entities within the scope of country by country reporting (CBCR) for the first reporting periods to which the rules apply, will have either met or be preparing to meet the notification deadline. For those UK entities which have non-UK ultimate parents, the notification requires consideration of which group entity will file the CBCR report […]
OECD Base Erosion and Profit Shifting (BEPS) Project – Update
On 2 April 2014 the OECD presented a second update on the BEPS (Base Erosion and Profit Shifting) project via a webcast, which is available for viewing on the OECD website (link). The key message was that the BEPS project is proceeding on track. The BEPS project will result in a huge change to international […]