Country-by-Country Reporting (CbCR) is part of Action 13 of the Base Erosion and Profit Shifting (BEPS) initiative led by the Organisation for Economic Co-operation and Development (OECD) and the Group of Twenty (G20) industrialised nations.
Under CbCR, all large multinational enterprises (MNEs) are required to prepare a Country-by-Country (CbC) Report with aggregate data on the global allocation of income, profit, taxes paid and economic activity amongst the various tax jurisdictions in which they operate. As per BEPS Guidance, it is recommended that the MNE Groups be compelled to comply with CbCR when the group consolidated turnover exceeds the OECD prescribed threshold of EUR 750 million or the respective country’s specified threshold.
The UAE Ministry of Finance issued a Cabinet of Ministers Resolution in July 2019 & June 2020 concerning the submission of reports by multinational companies, i.e. CbCR compliance requirements in the UAE. Similarly, KSA, Qatar and Egypt have issued their respective Domestic CbCR Legislation under the guidance of the BEPS initiative.
The purpose of CbCR is to identify risks and to eliminate any gap in information between the taxpayers and tax administrations with regard to where the economic value is generated within the MNE Group and whether it matches where profits are allocated and taxes are paid on a global level.
CbC legislation has increased the amount of information available to tax authorities, which has enabled them to perform better high-level assessments of transfer pricing risk. At the same time, CbCR requirements have imposed new compliance burdens on large MNE Groups.
Our worldwide network of advisors combines international experience with local tax knowledge to guide you for fact-based reporting and help you understand reporting responsibility for your business. Our skilled team can give you a thorough understanding of CbCR matters such as what is CbCR, to whom it applies, what are the procedures for compliances, penal provisions for non-compliance and assist you on the filings to be done globally.
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