United Kingdom


  • Service: Tax
  • Type: Business and industry issue
  • Date: 08/11/2013

Country by Country Reporting 

The Organisation for Economic Co-Operation and Development (OECD)’s proposal for introducing a mandatory Country by Country Report (CbC Report) to be submitted to tax authorities is now a reality.  On 8 June 2015 the OECD issued the Implementation Package in relation to Action 13 of the Base Erosion and Profit Shifting (BEPS) project.

The Implementation Package provides further guidance on the filing mechanism, scope of groups impacted, conditions for obtaining the report and the framework for the exchange of the reports. The report provides model legislation and agreements although it will be for each country to adopt the requirements into local law so there may be some local variations.

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OECD CbC  Report



The latest guidance issued on 8 June 2015 confirms points that were cited in the February 2015 report including, that reporting will commence for accounting periods starting on or after 1 January 2016, filing will be to the parent country tax authority, and should be within 12 months of the fiscal year in scope, so the first filings will be due by 31 December 2017. The report provides additional clarification in regards to the secondary filing mechanism, introduces a requirement to notify tax authorities of which company/country will be filing the report, the relevance of consolidated financial statements for determining the scope, the definition of a multinational enterprise, penalty regime and filing format.

There will be an exemption for multinationals with consolidated group revenue of less than €750m (or equivalent in local currency) in the prior financial year. Groups will need to monitor this threshold to assess if and when they come within scope. The €750m should be converted to local currency using a rate as at January 2015.

The members of the OECD and G20 have committed to bring the rules into local legislation and to develop a network of competent authority agreements to facilitate automatic sharing of the CbC Reports amongst relevant tax authorities. The June 2015 report includes three model Competent Authority Agreements, which could be used for the exchange of the reports. This includes guidance on how tax authorities should exchange the information, the timing of exchange, dealing with errors in the report, confidentiality, data safeguards, appropriate use of the data and the approach to resolving disputes. There will be conditions around confidentiality, consistency and use.

A secondary filing mechanism means that groups headquartered in non-implementing countries could still be required to file a global CbC report, if any of its subsidiaries are located in an implementing country. A local entity can be required to file a CbC report for the group directly with the local tax authority, or the group can nominate a Surrogate Parent Entity in another tax jurisdiction to be responsible for filing the report for the group with its tax jurisdiction, who in turn will then be responsible for sharing it with all other relevant tax authorities.

The February 2015 guidance indicates that the transfer pricing Master and Local files should be filed locally with each relevant tax authority.

The UK Government announced their intention to implement the OECD proposals at the Autumn Statement in November 2014 and included enabling legislation in the Finance Bill 2015 (external link).

Companies should now be considering their strategy to data gathering and reporting. There is flexibility in the sources of data and the choice of group or local GAAP and groups will need to assess which data sources are the most appropriate to get the balance right between managing the compliance burden and providing the most accurate view of their tax position and value chain.

In our experience given the time it will take to assess the requirements, determine the most appropriate data gathering approach and implement new processes and potentially new technologies, companies should now start to prepare.

There are a number of complexities to consider, including determining the relevant entities in scope, interpreting the OECD guidance in key areas such as definitions of revenue and corporate income tax, gathering data consistently and accurately for each country/entity, and aligning the CbC reporting template with the new Master File and Local File. Find out how we can help.


Other CbC reporting requirements

The OECD CbC Report is not the only country by country reporting requirement. Our briefing document summarises the various other mandatory reporting requirements affecting companies in certain specific sectors. Companies in these sectors will need to comply with these regulations plus the OECD CbC Report so will need to assess how to gather data efficiently to meet all relevant regulations. There are some differences in the definitions and requirements and companies will want to assess how to articulate the reason for any differences between these reports and the CbC Report as they will all be available to tax authorities.

In particular, the UK government has implemented Chapter 10 of the EU Accounting Directive for Extractive industries for financial years commencing on or after 1 January 2015.


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Julie Hughff

Julie Hughff


KPMG in the UK

020 7311 3287

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Aron Mayer

Aron Mayer

Senior Manager

KPMG in the UK

020 7311 3262

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