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Country by country reporting – practical issues

Country by country reporting – practical issues

Julie Hughff and Andrew Baillie take a look at some of the issues businesses may face surrounding country by country reporting.


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It is a year since the OECD published its final report on BEPS Action 13, recommending that multinational groups be required to file a Country by Country (CbC) report with tax authorities.

During that time, we have seen many countries adopt the OECD’s proposals (or at least signal their intention to do so). Action 13 also recommended that transfer pricing documentation be restructured in the format of a master file and local files, but it is the CbC report that has attracted most attention, with Governments keen to demonstrate that they are taking action to promote tax transparency. Following the OECD’s lead, in the spring of 2016 the EU proposed to go a step further with public CbC reporting, albeit recommending a reduced level of disclosure. More recently, a late amendment to the 2016 Finance Bill has provided the Treasury with the means to require groups to include a CbC report as part of their published UK tax strategy at some point in the future.

In this rapidly changing climate, multinational groups now have the unenviable task of getting to grips with the practicalities of complying with the rules. The OECD’s objective was to agree a global standard for CbC reports to enable data to be easily shared and compared by tax authorities when undertaking transfer pricing risk assessments, regardless of the country of origin or business sector. With some minor exceptions, this seems to have been achieved; inevitably, however, a ‘one size fits all’ approach has left many groups feeling that the CbC report raises more questions than answers.

In a recent article for Tax Journal*, Julie Hughff and Andy Baillie from KPMG in the UK give a brief overview of the requirements, and focus on some of the particular issues and complexities they have encountered so far in working alongside a number of groups. They also set out a suggested methodology to help those tackling a CbC reporting project for the first time, and key questions to think about in advance of submission.

*First published in Tax Journal on 7 October 2016. Reproduced with permission.

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KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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