The OECD released new handbooks describing best practices for country-by-country reporting.
The Country-by-Country Reporting: Handbook on Effective Implementation and The Country-by-Country Reporting: Handbook on Effective Tax Risk Assessment are intended to provide support to countries that are introducing country-by-country reporting, as well as to offer guidance for using the information they receive. The OECD notes that it intends to periodically update these books based on the experiences of countries that have adopted this reporting.
Operational and financial country-by-country reporting is part of a new transfer pricing documentation standard. This standard was created under BEPS Action 13. Country-by-country reporting refers to a disclosure form that reports certain financial metrics by tax jurisdiction in which a multinational enterprise group operates. It includes revenue, income, taxes and indicators of economic activity (i.e. employees, stated capital, retained earnings, tangible assets). The OECD recommends that the country-by-country report be prepared by multinational enterprise groups with annual revenue for the preceding year equal to or exceeding €750 million for taxation years beginning on or after January 1, 2016, with a filing due date 12 months after the end of the taxation year. The country-by-country information will be exchanged between treaty partners where the multinational enterprise group has operations (as reported on its country-by-country filing) that have implemented the country-by-country reporting standards.
Canada has accepted the OECD's country-by-country reporting standards and these requirements are set out in section 233.8 of the Act.
According to the OECD, The Country-by-Country Reporting: Handbook on Effective Implementation is a practical guide to assist countries in implementing country-by-country reporting, taking into account:
The Country-by-Country Reporting: Handbook on Effective Tax Risk Assessment supports countries in the effective use of country-by-country reports by incorporating them into a tax authority's risk assessment process, including:
For more information, contact your KPMG adviser.
Information is current to October 24, 2017. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour 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 upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500