UK country-by-country reporting

By Tolley

The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • UK country-by-country reporting
  • What is country-by-country reporting?
  • Key definitions
  • The threshold
  • Which entity must file the report?
  • Additional notification requirements
  • Content, form and method of filing
  • Provision of information
  • Filing deadline
  • Penalties
  • Anti-avoidance
  • Practical considerations
  • Public CbC reporting

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.

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 these proposals and the detailed recommendations are set out in the final report on Action 13: Transfer Pricing Documentation and Country-by-Country Reporting .

Certain MNEs are required to provide the relevant tax authorities with a report containing high-level details of the following:

  • territories in which they have carried out economic activity
  • the quantum of revenue and profits generated
  • the amount of tax paid

The OECD has developed a model CbC reporting template which is included in the final report on Action 13 (see Annex III to Chapter V).

As explained further below, the information contained in the CbC report may be shared with other tax authorities. Presenting the information in a standardised format across all jurisdictions will help to ensure consistency and allow tax authorities to assess where the greatest risks of avoidance lie and to focus resources on these areas.

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