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Australia: Involving human resources, mobility professionals in country-by-country reporting

Australia: Country-by-country reporting

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.


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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:

  • Who is an employee to be counted for these purposes? Are contractors or casual employees to be included?
  • When does one measure the number of employees? Are employees be measured at year-end or an average used?
  • Where are workers who have worked in multiple locations 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?


Read an October 2016 report prepared by the KPMG member firm in Australia

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