OECD has updated its Guidance on the implementation of BEPS Action 13: Country-by-Country Reporting. The update from the BEPS inclusive framework includes the issues relating to the definition of items reported in the template for the Country-by-Country Report (‘CbC Report’), ie. the definition of revenues, issues related to the amount of income tax accrued and income tax paid, and issues relating to the filing obligation for the CbC Report in respect of short accounting periods.
By way of background, OECD BEPS Action 13 Report introduced a three-tiered approach to transfer pricing documentation, consisting of a master file containing standardised information relevant for all members of a multinational group; a local file referring specifically to material transactions of the local taxpayer; and a CbC Report containing certain information relating to the global allocation of the group's income and taxes, together with indicators of the location of economic activity within the group. Where CbC Reporting applies, the ultimate parent entity of a group with annual consolidated group revenue equal to or higher than €750m (or near equivalent in domestic currency as of January 2015) in the preceding fiscal year is required to file a CbC Report on behalf of the group with its local tax authority. The deadline for filing the CbC Report is no later than 12 months after the last day of the group's reporting fiscal year. The tax authority with which the CbC Report is filed will exchange the CbC Report with the tax authority in other jurisdictions where the group has operations, under bilateral or multilateral tax treaties or tax information exchange agreements (TIEAs) that permit the automatic exchange of information. Countries have now moved to implementation phase.