Canada’s Department of Finance released draft legislative proposals to implement certain outstanding measures that were originally announced in the 2016 federal budget, including country-by-country reporting requirements.
The draft legislation sets out country-by-country (CbC) reporting requirements, as developed by the Organisation for Economic Cooperation and Development (OECD) and that would apply to a multinational enterprise (MNE) group that has total consolidated group revenue of €750 million or more in a fiscal year. The draft legislation provides:
A Canadian-resident "constituent entity" of an MNE group also would have to file the CbC report in certain circumstances. A constituent entity is a business entity within an MNE group that is included in the group's consolidated financial statements for financial reporting purposes (or would be required to be included if equity interests in any of the group's business entities were traded on a public securities exchange). It also includes any business entity that is excluded from the MNE group's consolidated financial statements solely for size or materiality reasons.
A Canadian-resident constituent entity must file the report when:
When there is more than one constituent entity (that is not the ultimate parent entity) of an MNE group in Canada, the draft legislation allows one constituent entities to be designated to file on behalf of other constituent entities in an MNE group.The draft legislation also allows a “surrogate parent” entity to file a CbC report, instead of the ultimate parent entity, when the surrogate parent's jurisdiction:
The draft legislation also extends the failure to file penalty to persons and partnerships who fail to file the CbC return.
Read an August 2016 report prepared by the KPMG member firm in Canada: 2016 Federal Budget - Draft Legislation Released
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.