In late 2018, CbC reporting was suspended for 2017, and guidance provided updated requirements for filing CbC notifications and CbC reports for the financial year beginning on or after 1 January 2018. Read TaxNewsFlash

Reporting period and due date

The CbC notification and CbC filing requirements are effective for the financial years beginning on or after 1 January 2018. The CbC notification and the CbC report are required to be submitted within 12 months as of the last day of the reporting financial period. Thus, for the financial year ending 31 December 2018, the due date for the CbC reporting will be 31 December 2019.

Entities required to submit CbC reports

Entities meeting the following criteria must file a CbC report:

• A resident in Qatar
• The ultimate parent entity of a multinational enterprise (MNE) group, and
• Total revenue of the MNE group is at least QAR 3 billion (approximately €700 million or U.S. $824 million) in the preceding financial year based on consolidated financial statements of that preceding year

Entities required to be included in CbC report

The financial and business data of the following entities must be covered in the CbC report:

• Separate business units of the MNE group included in the MNE’s consolidated financial statements for the purpose of financial reporting or included in the financial statements if the shares are listed on the stock exchange
• A business unit that is excluded from the consolidated financial statements of the MNE group only for reasons related to its size, or
• A permanent establishment of a separate business unit (as described in the above two bullet points) on the condition that the business unit prepares separate financial statements for that permanent establishment for regulatory or tax purposes, financial reporting purposes or internal management and supervisory purposes

Entities not required to file CbC report

Any constituent entity resident in Qatar for tax purposes when the ultimate parent entity is resident outside Qatar (non-Qatari ultimate parent) is not required to file CbC reports in Qatar until further notification, and also will not be required to submit a CbC notification about the identity of the reporting entity or its place of residence.

CbC report content, submission method, and penalties

The CbC report must include the information as described in the CbC reporting model as made available in the OECD’s base erosion and profit shifting (BEPS) Action 13 final report.

• The CbC notification must be submitted on the form provided last year.
• The CbC report must be submitted using the XML schema format, as per the guidance provided by the OECD (the Qatar tax authority will issue an announcement that will include the electronic link for the submission of the report).
• The tax authority will monitor instances of non-compliance with the CbC notification and CbC report filing requirements, and impose penalties provided for under Article 24 (8) of the Income Tax Law (which may be up to QR 500,000 (approximately U.S. $137,000)).

KPMG observation

The CbC reports must be prepared keeping in perspective the entire group operation, in various countries, because the Qatar tax authority will automatically share the report with the authorities of the countries in which the MNE operates. Accordingly, it will be critical for the reporting MNE to gather consistent and accurate CbC reporting data, analyze this data to review outliers and key trends, and produce a robust CbC report with supporting narrative and assumptions.

For more information, contact a KPMG tax professional in Qatar:

Barbara Henzen | +974 445 76 444 | bhenzen@kpmg.com