United Kingdom - Country-by-country reporting regulations 

December 17:  Regulations—Capital Requirement (Country-by-Country Reporting) Regulation 2013—and associated guidance have been published, and implement Article 89 of the Capital Requirements Directive IV requiring credit institutions and investment firms to report information on activities, employees, turnover (and ultimately profit, corporate taxes paid and subsidies) on a country-by-country basis.

Tax professionals have observed that the regulations are an improvement on the previous draft. The changes from the draft regulations (released in November 2013) include:

  • The definition of “accepted accounting standards” now includes both IFRS and UK GAAP.
  • The requirements to publish the information in the annual report have been eased, and the institution only must disclose in its annual report how it has (or will) comply with the requirement and include a reference to where (e.g., website) the information may be found.
  • The group reporting requirements have been clarified. Previously if a group had institutions subject to the rules but that were not in the same sub-group, the only option appeared to be to report on a full group consolidated basis. This has been amended so that full group reporting is permissible, but preparing separate reports for each in-scope institution is also possible.

KPMG observation

For large institutions compliance with these new requirements will be a complex exercise. The regulations and guidance do allow groups some flexibility to tailor disclosure to individual facts and circumstances—something that will need very careful consideration as new processes are put in place.

Read a December 2013 report [PDF 673 KB] prepared by the KPMG member firm in the UK: Weekly Tax Briefing (13 December 2013)

Other items discussed in this KPMG report concern:

  • CJEU decision on FII Group Litigation
  • Outcome of ECOFIN meeting on UK patent box regime
  • Stamp duty land tax – charities relief
  • Film tax relief – visual effects
  • Avoidance schemes using total return swaps
  • Indirect tax items (reverse charge on mobile phones, computer chips, and emissions allowances)

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