The OECD’s inclusive framework has released additional guidance designed to provide certainty to tax administrations and multinationals on the implementation of country-by-country reporting (CBCR) in several specific areas, as part of action 13 in its base erosion and profit shifting (BEPS) project
These include how to report amounts taken from financial statements prepared using fair value accounting; how to treat a negative figure for accumulated earnings in Table 1; how to treat mergers/acquisitions/de-mergers; how to treat short accounting periods; and the definition of total consolidated group revenue.
The additional guidance forms part of regular updates which the OECD is making in response to questions raised during implementation of the new standards.
The OECD says that since the action 13 report was released, jurisdictions have made great efforts to establish the necessary domestic and international legal and administrative frameworks for the filing and exchange of CBCR in accordance with the new minimum standard, while the global landscape for CBCR by multinationals groups is still evolving.
It says this initial period may be challenging for both tax administrations and multinationals seeking to be compliant with CBCR, which may call for a pragmatic approach that takes into account ‘best efforts’ made to comply with CBCR related obligations.
The OECD says these challenges should diminish over time, as the global landscape for CBCR becomes more settled and both tax administrations and multinationals gain in experience.
Guidance on Country-by-Country Reporting: BEPS Action 13 is here.
Report by Pat Sweet
