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OECD: Update on second peer review, country-by-country reporting

OECD: Update on second peer review, CbC reporting

The Organisation for Economic Cooperation and Development (OECD) today released the outcomes of the second phase of peer review of the base erosion and profit shifting (BEPS) Action 13 country-by-country (CbC) reporting initiative.


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According to the OECD release, the second phase of the CbC peer review status shows “strong progress in continuing efforts to improve the taxation of multinational enterprises (MNEs) worldwide.”

The second annual peer review considers implementation of the CbC reporting minimum standard by jurisdictions (measured as of April 2019) and reveals:

  • Coverage increased to 116 jurisdictions. The peer review includes a comprehensive examination of 116 Inclusive Framework members. A small number of members were not included in this review either because they recently joined the Inclusive Framework or they faced capacity constraints, but they will be reviewed as soon as possible.
  • Large MNEs now covered. Over 80 jurisdictions have already introduced legislation to impose a filing obligation on MNE groups, covering almost all MNE groups with consolidated group revenue at or above the threshold of €750 million. Remaining Inclusive Framework members are working towards finalizing their domestic legal frameworks with the support of the OECD.
  • Implementation largely consistent with BEPS Action 13. When legislation is in place, implementation of CbC reporting has been found largely consistent with the Action 13 minimum standard.
  • Jurisdictions acting on prior recommendations. Sixty two (62) recommendations made in the first peer review have been addressed, and these recommendations have been removed. Read TaxNewsFlash
  • Over 2,200 exchange relationships now in place. Exchanges of CbC reports began in June 2018, and more than 2200 bilateral relationships for CbC exchanges are now in place.


CbC reporting is one of the four minimum standards of the BEPS project, and requires tax administrations to collect and share detailed information on all large MNEs doing business in their country. The CbC information includes:

  • The amount of revenue reported
  • Profit before income tax
  • Income tax paid and accrued
  • Stated capital, accumulated earnings, number of employees and tangible assets (reported by jurisdiction)

CbC reporting is intended to provide a level of transparency to tax administrations. As a result, tax administrations will have access to detailed information on all large MNEs doing business in their country.

Because CbC reporting is one of the four minimum standards of the BEPS project, all members of the Inclusive Framework on BEPS have committed to implement it, and to have their compliance with the standard reviewed and monitored by their peers. 

What’s next?

Following the first exchanges of CbC reports, the OECD stated that work is underway to support the effective use of CbC reports by tax administrations in assessing transfer pricing and other BEPS-related risks.

Building on the OECD Forum on Tax Administration’s Country-by-Country Reporting: Handbook on Effective Tax Risk Assessment, an automated “tax risk evaluation and assessment tool” (TREAT) is currently being developed to help tax administrations—in particular those of developing countries—use CbC reports to identify important indicators of potential tax risk.

Other initiatives include:

  • International compliance assurance programme (ICAP) pilot program for a multilateral risk assessment of large MNEs
  • Comparative risk assessment (CoRA) initiative to improve tax administrations’ understanding of common international tax risk and consistency in the interpretation of potential indicators that specific risks may or may not be present

The OECD anticipates that these projects will support tax administrations in using CbC reports and other data to identify areas where the tax risk posed by an MNE group is low and instead to focus resources on those issues when further attention is required.

In addition to these initiatives, work has now started on a review of the CbC reporting minimum standard, which will include a public consultation in early 2020.

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