CBCR Compliance in GCC

Country-by-Country Reporting (CbCR) is a requirement of the Organization for Economic Co-operation and Development (OECD) through its Guidance under Action 13 of Base Erosion and Profit Shifting (BEPS) Initiative. CbCR is shared between various tax jurisdictions where the subsidiaries of a Multinational-Enterprise (MNE) Group are placed to ascertain how the multinational group functions, Global allocation of MNE’s revenue, Taxes paid each jurisdiction, capital employed and economic activity in each jurisdiction. Amongst the Gulf Co-operation Council (GCC) Countries, Kingdom of Saudi Arabia (KSA), Qatar, UAE and Oman have implemented CbCR as part of their respective Income Tax Laws (ITL) however; other GCC Countries, viz. Bahrain and Kuwait are yet to introduce CbCR under their Domestic Tax/ Transfer pricing (TP) Laws.  

Applicability Conditions

 

Particulars	KSA	Qatar	UAE	Oman
Applicable to	To Zakat and/or Income Tax payers of MNE Group	To Qatari Tax resident entities of an MNE Group	To UAE Tax resident Ultimate Parent Entity (‘UPE’) of an MNE Group	To Omani Tax resident entities of an MNE Group
Threshold limit	Consolidated Group Turnover (CGT) >= SAR 3.2 Billion (USD 853 Million approx.) in the previous year	CGT >= QAR 3 Billion (USD 824 Million approx.) in the previous year	CGT >= AED 3.15 Billion (USD 858 Million approx.) in the previous year	CGT >= OMR 300 Million (approx. USD 780 Million) in the previous year
Applicability period	Financial years (FYs) starting on or after 1 Jan 2018	FYs starting on or after 1 Jan 2018	FYs starting on or after 1 Jan 2019	FYs starting on or after 1 Jan 2020

Compliance Requirements

 

Particulars	KSA	Qatar	UAE	Oman
CbC Notification filing	KSA resident Constituent Entity (CE) of MNE	Qatari resident CE of an MNE Group. (This requirement presently suspended until further notice).	UAE resident Ultimate Parent Entity	Omani resident CE of an MNE Group.
	Within 120 days from the last day of FY of the CE	Last day of FY of the entity.	Last day of FY of the entity	Last day of FY of the entity
CbC Report filing	1. To be filed by UPE or the Surrogate Parent Entity (‘SPE’) based in KSA 2. Constituent Entity (CE) in KSA other than UPE/SPE may also need to file CbCR in KSA in certain specified cases	1. To be filed by UPE or SPE based in Qatar 2. Qatari CE other than UPE/SPE may also need to file CbCR in Qatar in certain specified cases. (This requirement presently suspended until further notice).	To be filed by UPE based in UAE	1. To be filed by UPE or SPE based in Oman 2. CE in Oman other than UPE/SPE may also need to file CbCR in certain specified cases
	1 year from end of FY of the entity	1 year from end of FY of the entity	1 year from end of FY of the entity	1 year from end of FY of the entity

Non-Compliance Penalties

 

Particulars	KSA	Qatar	UAE	Oman
Penalties for non-filing / incorrect filing	Normal penalties as per Zakat and/ or ITL may apply i.e. Higher of -       1% of Revenue up to SAR 20,000/-  OR -       5% to 25% penalty on unpaid tax	Up to QAR 500,000	- Failure & delay in CbCR filing & Notification: AED 1 Million +10,000/- per day up to AED 250,000/- - Other penalty ranging from AED 50,000/- to 500,000/-	No specific penalties prescribed as yet. General Penalties under Omani Income Tax Law likely to apply.

How can MBG help?

  We at MBG Corporate Services have an in-depth understanding of the CbCR compliance requirements and assist taxpayers in timely filings & accurate compliances through our systematic, well-aligned & in sync filing approach, covering

• Understanding the Business Model to comply with regulations
• Assistance in compiling data for reporting
• Advisory on the provisions of regulations
• Assistance in filing notification and report.