Country by Country Reporting
In 2017 the OECD significantly increased the compliance burden on businesses operating in multiple tax jurisdictions by introducing Country by Country reporting. This is a regulatory requirement aimed at increasing the level of scrutiny of the global business operations of multinational enterprises (MNEs). The concept is part of the Base Erosion and Profit Shifting (BEPS) initiative, which is an effort led by the Organisation for Economic Co-operation and Development (OECD) to attack tax avoidance strategies used by some MNEs.
Criteria Of Companies Required to Report
Under the OECD rules, the reporting obligation applies to MNEs that have a presence in multiple tax jurisdictions and with a consolidated group revenue above €750. This group revenue threshold varies slightly in some jurisdictions, ranging from €600 million - €800 million.
Typically, the ultimate parent entity of the MNE group it is required to submit the Country-by-Country report to the tax authority of its country of residence. Sometimes, however, it can be a subsidiary entity that has to submit the report in its own tax jurisdiction. This will usually be the case where the ultimate parent entity is situated in a country which is not on the OECD list.
Under Country-by-Country Reporting (CbC), qualifying ultimate parent entities are required to provide detailed information on their global business activities, profits, and taxes paid in each country where they operate. In the UK, this would be reported to HM Revenue & Customs.
The idea is to provide tax authorities with a comprehensive picture of the MNE's operations, enabling them to better surveil transfer pricing practices and attack potential tax avoidance strategies.
Automatic Exchange of Information
Many countries such as the UK, have established automatic exchange of information agreements, allowing the reporting jurisdiction to distribute the CbC Reporting information to tax authorities in other jurisdictions where the MNE operates. This allows multiple tax authorities to conduct surveillance of the global tax compliance of the MNE.
The key components of Country-by-Country Reports include:
- Revenue and Profit Information: Details of the revenue, profit and loss before income tax for each jurisdiction where the company operates.
- Tax Jurisdiction Information: Identification of each tax jurisdiction in which the company does business.
- Employee and Asset Information: Information on the number of employees and tangible assets in each jurisdiction.
- Business Activities: information about the business activities conducted in each jurisdiction.
Country-by-Country Reporting Services
CbC Report Preparation and Filing: We are well-versed in the latest regulatory requirements. We can assist your organisation in preparing and filing accurate Country by Country Reports, ensuring compliance with local and international regulations.
Data Collection and Analysis: Gathering and analysing financial and operational data across jurisdictions is a crucial step in CbC Reporting. We streamline this process, ensuring the accuracy and completeness of reports.
Customised Compliance Strategies: Every business is unique, and so are its tax challenges. We work closely with our clients to develop customised compliance strategies that align with their global business operations, helping them mitigate risks and optimise their tax positions.
Strategic Advisory Services: Beyond compliance, we offer strategic advisory services to help you make informed decisions. We can assist in identifying opportunities for tax optimisation and risk management, ensuring your business remains competitive on the global stage.
Why Choose Friend Partnership?
Expertise: Our team comprises seasoned professionals with in-depth knowledge of international tax regulations and reporting requirements.
Centred Approach: We prioritise understanding the unique needs of each of our clients, offering personalised solutions to meet specific requirements.
Compliance Assurance: We will ensure that your Country-by-Country Reporting complies with the latest regulations, minimising the risk of penalties and audits.
Contact us today to discuss how our services can benefit your organisation.
Make A Country-by-Country Reporting Enquiry
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