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 and 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.
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 to year. Issues include:
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