What is country-by-country reporting?
Country-by-country (CbC) reporting essentially requires large multinational enterprises (MNEs) to provide an annual return that breaks down the key elements of their activities among the jurisdictions in which they operate.
For accounting periods beginning on or after 1 April 2023, additional transfer pricing documentation requirements are required for MNEs within the CbC reporting regime. For more information, see the UK transfer pricing in practice guidance note.
The role of the Organisation for Economic Co-operation and Development (OECD)
MNEs are under increasing pressure to operate in a fair and transparent way, with particular regard to the payment of taxes and making a fair contribution to public finances. Meanwhile, governments across the globe are under pressure to reduce public deficits, generate higher tax revenues and tackle international tax avoidance. In response to these issues, the OECD has developed a range of proposals as part of the wider base erosion and profit shifting (BEPS) project. The final package of recommendations was published by the OECD on 5 October 2015.
CbC reporting is one of the areas covered by
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