On 24 March 2017, the Income Tax (Country-by-Country Reporting) Regulations 2017 came into operation. The regulations introduce a CbC reporting obligation, in accordance with Action 13 of the OECD Base Erosion and Profit Shifting (BEPS) project, for fiscal years commencing on or after 1 January 2017. Voluntary filing is possible for fiscal years commencing on or after 1 January 2016.
CbC reports must be submitted by multinational groups with total consolidated group revenue of €750 million or more. The reports must be submitted by the group's ultimate parent entity resident in the Isle of Man for tax purposes no later than 12 months and one day following the last day of the reporting fiscal year. However, under certain circumstances, the reporting obligations may also be shifted to a subsidiary of the group or to a permanent establishment.
The CbC report must contain:
- Aggregate information relating to the amount of revenue, profit or loss before income tax, income tax paid, income tax accrued, stated capital, accumulated earnings, number of employees and tangible assets other than cash or cash equivalents with regard to each jurisdiction in which the MNE group operates
- Identification of each constituent entity of the MNE group setting out the relevant jurisdiction of tax residence and, where different, the jurisdiction under the laws of which it is organized, and the nature of its main business activity or activities
The CbC report must be electronically filed according to the definitions and instructions contained in Annex III to Chapter V of the OECD "Transfer Pricing Documentation and Country-by Country Reporting – Action 13: 2015 Final Report". Penalties apply in the case of omitted or late filing and filing of inaccurate information.
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