South Africa: SARS issues final regulations on country-by-country (CbC) reporting

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The South African Revenue Service has issued final regulations on country-by-country (CbC) reporting on 23 December 2016. The regulations specify the changes to the Country-by-Country Reporting Standard for Multinational Enterprises (“MNEs”) required for South Africa’s circumstances.

For purposes of these Regulations, a Country-by-Country Report with respect to an MNE Group is a report containing: (i) Aggregate information relating to the amount of revenue, profit (loss) before income tax, income tax paid, income tax accrued, stated capital, accumulated earnings, number of employees, and tangible assets other than cash or cash equivalents with regard to each jurisdiction in which the MNE Group operates; (ii) An identification of each Constituent Entity of the MNE Group setting out the jurisdiction of tax residence of such Constituent Entity, and where different from such jurisdiction of tax residence, the jurisdiction under the laws of which such Constituent Entity is organised, and the nature of the main business activity or activities of such Constituent Entity.

The Country-by-Country Report must contain the information set out in, and apply the definitions and instructions contained in, the standard template set out in “Annex III to Chapter V” set out in the OECD/G20 Base Erosion and Profit Shifting Project Transfer Pricing Documentation and Country-by-Country Reporting, Action 13 – 2015 Final Report. SARS must only use the Country-by-Country Report for purposes of assessing high-level transfer pricing risks and other base erosion and profit shifting related risks in South Africa. SARS must preserve the confidentiality of the information contained in the Country-by-Country Report at least to the same extent that would apply if such information were provided to it under the provisions of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

The Country-by-Country Report required by these regulations must be filed no later than 12 months after the last day of the Reporting Fiscal Year of the MNE Group. These regulations are effective for Reporting Fiscal Years of MNE Groups beginning on or after 1 January 2016.

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