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Country by Country Reporting: time to involve Human Resources

CBC Reporting: time to involve HR

Jane Rolfe and Mardi Heinrich explain what HR professionals need to know about Country by Country reporting.


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Country-by-Country (CbC) reporting is not just about corporate income tax and transfer pricing. The Organisation for Economic Co-operation and Development (OECD) Base Erosion Profit Shifting (BEPS) Action 13 focuses on the global value chain of an organisation and requires reporting of the number of employees in each country.

Accordingly, Human Resources (HR) and mobility professionals need to be brought into discussions on CbC reporting. The decisions made regarding employee reporting may have knock on effects for years to come.

The main things you need to know:

  • CbC reports require reporting of the number of "employees on a full time equivalent basis" for each jurisdiction in which the organisation has ‘Constituent Entities’. The determination of “full time equivalent basis” is left to the judgment of the organisation provided it is reasonable and applied consistently in all jurisdictions year on year.
  • Issues include:

Who is an employee to be counted for these purposes? Should contractors or casual employees be included?

–  When does one measure the number of employees? Should employees be measured at year end or an average used?

Where should workers who have worked in multiple locations be classified?

How is the data going to be extracted? Will there be system challenges to obtain the required data? Are controls in place to ensure data collected is consistent across jurisdictions?

  • How will the output of the employee data impact the organisation’s CbC report? Employee numbers will be used by the OECD and tax authorities as an indicator of economic activity and value-add in each tax jurisdiction. Would the employee data compared to the financial data on the report increase the risk of enquiry to the organisation?

KPMG’s team of professionals is well placed to assist in making sense of the CbC requirements and how to respond to them.

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