Commentary

B4.162 Country-by-country reporting requirement

Business tax
Business tax | Commentary

B4.162 Country-by-country reporting requirement

Business tax | Commentary

B4.162 Country-by-country reporting requirement

In response to the OECD Base Erosion and Profit Shifting (BEPS) project1 the UK (along with other OECD and G20 countries) introduced a country-by-country (CbC) reporting requirement2. The OECD Guidance can be found at Guidance on the implementation of CbC Reporting: BEPS Action 13 and HMRC guidance in their International Exchange of Information Manual starting at IEIM300010.

The CbC reporting initiative has been subject to a number of peer reviews to assess the success of the regime in continuing efforts to improve the taxation of multinational enterprises (MNEs) worldwide. See the OECD website for details of the 2020 review of the CbC reporting minimum standard.

Qualifying entities for CbC reporting

The CbC reporting requirement applies to MNEs which meet the 'threshold amount' in an accounting period starting before and ending on or after 31 December 2015, or starting on or after 1 January 20163.

When determining members of an MNE, the governing rule is to follow the accounting consolidation rules.

The 'threshold amount' is met where the multinational enterprise has a consolidated group revenue of €750m or more4 (reduced proportionally for accounting periods of less than 12 months5). If a currency other than Euros is used to produce the consolidated financial statements, the average exchange rate for the accounting period is applied to ascertain whether the threshold is met6. Where the ultimate parent entity has implemented a reporting threshold that is a near equivalent of €750m in domestic currency as it was at January 2015, an MNE group that

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