At year-end 2019 companies must once again comply with their CbCR requirements. Keep reading to find out more about the requirements.
Since 2016, multinational enterprises (MNEs) are required, if certain conditions are met, to submit country-by-county reporting (CbCR) to the German Federal Central Tax Office (BZSt). This provides the tax authorities with information on business activities and potential tax risks of transfer pricing arrangements.
Is preparing CbCR for financial year 2018 already (back) on your to-do list?
If any of the following scenarios apply to you, you are required to prepare CbCR:
1. Domestic group parent companies with their registered office or management in Germany whose consolidated financial statements contain at least one company with its registered office or management outside of Germany or a foreign permanent establishment and which report consolidated revenue of at least EUR 750 million in the prior financial year.
2. Domestic group companies of an MNE which have been designated for surrogate filing in the context of the rule of representation under Section 138a (3) of the German Tax Code [AO] (constituent entities) by virtue of a special authorisation from the foreign group parent company.
3. Secondary disclosure requirements: Where neither 1. nor 2. is applicable or, respectively, if the German Federal Central Tax Office (BZSt) does not receive CbCR from another country, domestic group companies are required to submit comprehensive CbCR to the BZSt. This means that the German group companies must report all available information and data relevant according to the CbCR requirements.
Insofar as the Multilateral Competent Authority Agreement on the Exchange of CbCR (MCAA) applies or bilateral agreements regarding the exchange of CbCR are in place between Germany and the countries relevant for the MNE in question, the BZSt forwards the CbCR onto the competent authorities in these other tax jurisdictions. If the MCAA does not apply or there are no bilateral agreements in place, you need to check whether there are local CbCR submission requirements in other countries relevant for the MNE.
In our CbCR brochure you can find...
Download the brochure „Country-by-Country Reporting: Fit for country specific reporting - Major aspects of data generation and transmission for German enterprises" here.
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