Globally, there has been a noticeable increase in countries preparing for country-by-country (CBC) reporting pursuant to the OECD’s BEPs Action Plan (‘Plan’).
Action 13 of the Plan: Country-by-Country Reporting covers these recommendations:
The United States’ issue of the procedures for the ultimate parent entity of its MNEs to file Form 8975 later this year comes about pursuant to final Treasury Regulations being issued in June 2016. The ultimate parent of an MNE group is required to prepare and file Form 8975 and Schedule A. Thereby reporting information on the MNE’s activity in foreign jurisdictions, including:
- the tax jurisdiction that the MNE is operating in,
- revenues, split into two categories: related party and unrelated party,
- profit or loss from the jurisdiction,
- income tax paid and accrued,
- capital,
- accumulated earnings,
- number of employees,
- tangible assets excluding cash and cash equivalents.
This is in line with the reporting requirements set out in Article 4 of Action 13 of the Plan.
Meanwhile, New Zealand now requires New Zealand-headquartered groups earning annual global revenue in excess of EUR750 million to report using CBC reporting. The earliest round of reporting is required from groups with a 31 December balance date. They are required to report for the 2016 reporting period.
Other groups with an ultimate parent entity resident in New Zealand that have a balance date of 31 March or 30 June are required to collect this information from 1 April 2016 or 1 July 2016 respectively. Thus CBC reporting is now underway for affected MNEs with the ultimate parent being located in New Zealand.
Data reporting requirements are consistent with those listed above being reported by U.S. MNEs on Schedule A. They are as set out in Article 4 of Action 13 of the OECD Plan.