For accounting periods starting on or after 1 January 2016, multinationals with a UK tax resident ultimate parent with consolidated group revenues above the sterling equivalent of €750 million in the previous period (converted at the average exchange rate for that period) will be required to submit an annual country-by-country (CbC) report for the global group to HM Revenue & Customs (HMRC) within 12 months of the year-end
The UK rules, in a change from the original draft, provide that groups with a foreign parent in a country that does not introduce CbC reporting or does not have an effective exchange mechanism with the UK will have a requirement to file a “UK CbC report” with HMRC for the UK sub-group unless certain exceptions apply. Broadly, the exceptions apply when a group company has filed a global CbC report either in a territory with an effective exchange agreement with HMRC or in the UK under the voluntary surrogate mechanism. There are notification requirements that need to be complied with before the filing deadline.
A recurring question is "what needs to be done to prepare" for CbC reporting? In general, companies need to be determining whether they are in scope of the UK rules and / or other countries rules, determining their strategy for data collection and reporting, doing dry-runs and risk assessing the data.
Read a March 2016 report prepared by the KPMG member firm in the UK: Country-by-country reporting
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.