HMRC has published guidance setting out the process for multinationals in line with OECD requirements for country-by-country reporting (CBCR), with the first reports due by 1 September 2017
The reporting requirements apply to multinational groups with a consolidated revenue of €750m (£680m) or more in the relevant accounting period or equivalent, which is referred to in the guidance as the ‘reporting period’.
HMRC says those filing will need to know which business, company or partnership is in overall control of a multinational group. This will be the ‘group parent business’, which the OECD refers to as the ‘ultimate parent entity’.
For HMRC’s purposes, multinationals will have to send in the group’s country-by-country report if they meet any of a number of criteria. These include being based in the UK, and being the group parent business of the group in question.
The requirements also apply to the highest level UK business of a group whose group parent business is based in a country that either does not require that group parent business to file a country-by-country report; has entered into a tax information exchange agreement, but with no CBCR requirements; or has information exchange agreements already in place between it and the UK, but HMRC has notified the business that they are not working effectively.
If a group needs to send a report, it must tell HMRC each year at the end of its reporting period whether the group intends to file a full report with HMRC or with another jurisdiction which will exchange the report with HMRC. Groups must also supply details of who will be sending the report, which country the report will be sent to, and the names and unique taxpayer references of all their UK businesses.
Business will not have to notify HMRC if a different group parent business in their group has already sent a complete notification. The other group parent business will need to have included that business’s details along with making it clear that they are sending it on their behalf.
HMRC has confirmed that the required format for country-by-country reporting will be via an XML (extensible markup language) schema, to ensure international consistency.
The guidance points out that the international exchange of information manual includes specific directions relating to the content and form of presentation of the CBCR and notifications, and the method for filing reports and providing notifications.
HMRC Guidance Check if you must send a country-by-country report is here.
International Exchange of Information Manual is here.
