Update on Country-by-Country Reporting

OECD, Base Erosion and Profit Shifting (BEPS), Action Plan

Several countries, listed below, have passed laws implementing Country-by-Country (CbC) reporting (and other transfer pricing disclosure requirements based on Action 13 of the BEPS Action Plan) by the financial year-end 2015.


The Australian Parliament on 3 December 2015 passed the multinational anti-avoidance rule (i.e. Australia's 'de facto' diverted profits tax regime) and the CbC reporting regime. The new rule also foresees the amendment of tax laws governing the Australian Taxation Office (ATO) public disclosures of tax return data to now include Australian owned private companies with annual income of A$200 million or more, as well as the requirement for Australian businesses of multinational corporations with global income of A$1 billion or more to prepare general purpose financial reports for years commencing on or after 1 July 2016. In addition, the ATO on 17 December 2015 released guidelines that address CbC reporting.


The Danish Parliament on 18 December 2015 passed the legislation to require CbC reporting. Accordingly, multinational groups whose ultimate parent company is a resident in Denmark will be required to make CbC reporting submissions. The CbC reporting rules will also affect foreign group entities that are residents in Denmark if certain conditions are met.


On 18 December, 2015, the French Parliament adopted the Finance Bill for 2016, which includes a "CbC reporting" for the largest multinational enterprises. This CbC reporting requirement generally reflects the BEPS recommendations. Contrary to the initial proposal, the disclosure will not be made public.


The President on 22 December 2015 signed into law Finance Act 2015 that includes rules following the OECD's recommended CbC reporting requirements. The Finance Act provision closely mirrors the OECD's suggested model legislation.


The 2016 budget law voted on 22 December 2015 includes CbC annual reporting requirements for multinational entities pursuant to the BEPS recommendations.


The Ruling Coalition on 16 December 2015 agreed on the Outline of the 2016 Tax Reform proposals, which includes rules on CbC reporting based on BEPS 13 recommendations.


Korea's Parliament on 2 December 2015 approved legislation to implement BEPS 13 recommendations. The rules require all Korean domestic corporations and all foreign corporations with a domestic place of business in Korea that are engaged in certain cross-border related-party transactions to file both master file and local file reports.


New law in Poland expands the requirements for transfer pricing documentation and includes CbC reporting. The new provisions essentially reflect the recommendations made in BEPS Action 13, and provide for CbC, master file and local file reporting. The legislation was passed by the Lower House in September 2015 and the President signed the amendments to the law on 27 October 2015.

United States

The Treasury Department and IRS on 21 December 2015 released for publication in the Federal Register proposed regulations that would require annual CbC by U.S. persons that are the ultimate parent entity of a multinational enterprise (MNE) group. Read text of the proposed regulations on country-by-country (CbC) reporting.

* Thomas Linder

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