The Organisation for Economic Co-operation and Development has released the first peer reviews of the Country-by-Country (CbC) reporting initiative. The peer reviews show that practically all countries that serve as headquarters to the large MNEs covered by the initiative have introduced new reporting obligations compliant with transparency requirements.

Country-by-Country reporting, with exchanges slated to begin in June 2018, will see tax administrations worldwide collect and share detailed information on all large MNEs doing business in their country. Information collected includes the amount of revenue reported, profit before income tax, and income tax paid and accrued, as well as the stated capital, accumulated earnings, number of employees and tangible assets, broken down by jurisdiction. More than 1400 bilateral relationships are already in place for CbC exchanges, with more to come throughout the year.

CbC reporting is a minimum standard of the OECD/G20 Base Erosion and Profit Shifting initiative, which aims to equip governments with the domestic and international instruments needed to ensure that MNE profits are taxed where economic activities generating the profits are performed, and where value is created. OECD and G20 countries approved a 15-point BEPS package in 2015 to help them curb tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits.

“The peer review outcomes and the launch of the global exchange of CbC reports in June shows that the BEPS measures are being implemented rapidly, consistently and globally,” said Pascal Saint-Amans, director of the OECD Centre for Tax Policy and Administration.

Highlights from the report include:

  • a comprehensive examination of 95 jurisdictions that are members of the Inclusive Framework. A few jurisdictions that were recent joiners of the Inclusive Framework or that faced capacity constraints were not yet included in the process, but will be reviewed as soon as possible*.
  • 60 jurisdictions have already introduced legislation to impose a filing obligation on MNE Groups, thus covering almost all MNE Groups expected to be in scope. The remaining jurisdictions are working towards finalising their domestic legal framework with the support of the OECD.
  • where legislation is in place, the implementation of CbC Reporting has been found largely consistent with the Action 13 minimum standard. Some jurisdictions have received recommendations for improvement on certain specific aspects of their legislation and work has already begun to bring the provisions concerned in line with the standard.

To read more about the second annual peer review, next steps and background, please visit the press release.


(Source: OECD Press Release | Read the Report (Phase 1) | Tax Co-operation Map)

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