Tax & Accounting Blog

OECD Releases Initial Peer Reviews on Implementation of CbC Reporting

BEPS, Blog, Global Tax Planning, International Reporting & Compliance May 29, 2018

On May 24, 2018, the OECD issued a press release on the initial peer reviews of the country-by-country (CbC) reporting initiative. Based on the reviews, many countries have CbC reporting legislation in place.

Under the BEPS Action 13 minimum standard, jurisdictions have committed to tax transparency by requesting large MNE groups to provide the global allocation of their income, taxes, and other indicators of the location of economic activity. The first annual peer review focuses mainly on the domestic legal and administrative framework. It is part of a phased approach that monitors the domestic legal and administrative framework, the exchange of information framework, and the confidentiality and appropriate use conditions over three annual reviews (2017, 2018, 2019). The second annual peer review, covering all members of the Inclusive Framework, was launched in April 2018. It will focus on the exchange of information, as well as the confidentiality and appropriate use conditions.

The key findings presented in the initial peer review report are current as of January 12, 2018. According to the report, 60 jurisdictions have a comprehensive domestic legal and administrative framework in place. A few jurisdictions are awaiting official publication of their final legislation. Some jurisdictions need to complete additional guidance. 28 jurisdictions received recommendations to their legal and administrative framework. Finally, the OECD recommended that 33 jurisdictions (most of these do not require CbC reporting for the 2016 fiscal year) put in place or finalize their domestic legal and administrative framework.

With respect to the exchange of CbC reports, 58 jurisdictions have multilateral or bilateral competent authority agreements (CAAs) in place that are effective for tax periods beginning on or after January 1, 2016, or on or after January 1, 2017. 39 jurisdictions provided detailed information on appropriate use of CbC report information.

According to the press release, the initial exchange of CbC reports should begin in June 2018. Information collected includes the amount of revenue reported, profit before income tax, income tax paid and accrued, as well as the stated capital, accumulated earnings, number of employees, and tangible assets, broken down by jurisdiction. More than 1,400 bilateral relationships are currently in place for CbC exchanges, with more expected throughout 2018.

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