New information on Country-by-Country reporting should
give more certainty to tax administrations and multinationals on
how to implement it.
On 5 December 2016, the OECD released further guidance on
Country-by-Country (CbC) reporting and country-specific information
on implementation of the guidance. CbC reporting is linked to
action point 13 in the Base Erosion and Profit Shifting (BEPS)
Background on BEPS
Base erosion and profit shifting are tax avoidance strategies
mostly used to exploit loopholes within the tax/legal environment
by shifting profits from one specific country to a country with low
or no tax, where, in most cases, the company has no or little
Currently over 100 countries and jurisdictions have, or will,
implement regulations to address base erosion and profit shifting
as part of the OECD's initiative to counter fight these
practises. Both the OECD and the participating countries issued a
report in 2015 containing the so called 15 action points to be taken into
consideration and implementation by countries when dealing with
The main focus of these action points is to identify and
neutralise gaps and mismatches in tax rules across the countries,
and facilitate increased exchange of tax information between
jurisdictions to improve tax compliance.
New rules and regulations along the way
The implementation of BEPS-related laws and regulations is a
rolling process, as each country is implementing BEPS action points
with different views, interpretations and timelines. The OECD is
continuously providing additional guidance on how these action
points should be interpreted and suggesting best ways for them to
As part of such, on 5 December 2016 the OECD released further
guidance on CbC reporting and country-specific information on
implementation of the guidance, specifically:
Key details of jurisdictions'
legal framework for CbC reporting
Additional interpretive guidance on
the CbC reporting standard.
In short, the new information on country-specific reporting
should give more certainty to tax administrations and
multinationals on how to implement CbC reporting. It affects the
timeline when CbC reporting has to be done, whether surrogate
filing and voluntary filing is available for specific countries and
if local CbC filing is required. Furthermore it contains
information on the implementation of international exchange of CbC
reports between country tax administrations.
The guidance tackles the case where notification to the country
tax administration involves identifying the reporting entity within
the multinationals' structure, and how, once identified that
such a notification is required it's up to the jurisdictions to
set a due date for acting upon it, thus providing some flexibility.
This will be relevant while jurisdictions transit through the
finalisation of their local implementation of CbC reporting and
multinationals adapt to the new norms.
Talk to us
New jurisdictions are joining, current participating ones are
implementing related local regulations and multinationals are faced
with continuous reminders of their need to look out for the
changes, understand them, embrace them and adhere to them.
Our experts are here to help. We provide services addressing the
concerns from the OECD's BEPS initiative. We assist clients
with their BEPS reviews, their notification duties, the
implementation of Local and Master file depending on their country
and structure, understanding challenges within their transfer
pricing documentation and other related services.
Should you be interested in learning more or have any questions,
please click on 'get in touch' and fill in our 'make an
enquiry' form, and we will get in contact with you as soon as
Under current law, where a business subject to corporation tax or income tax reallocates an existing asset into its trading stock, the basic rule is that there is a deemed market value disposal of the asset...
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