On 30 March 2018, IRS released an advance copy of Notice 2018-31 concerning national security considerations with respect to country-by-country (CbC) reporting. In consideration of the national security interests of the United States, the notice addresses modifications to the reporting requirement under §1.6038-4 with respect to certain U.S. multinational enterprise (MNE) groups. The Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) intend to amend §1.6038-4 to incorporate the guidance described in the notice. Prior to the issuance of these amendments, U.S. MNE groups may rely on the provisions of section 3 of this notice.
A U.S. multinational enterprise (MNE) group is a “specified national security contractor” if more than 50 percent of the U.S. MNE group’s annual revenue, as determined in accordance with U.S. generally accepted accounting principles, in the preceding reporting period is attributable to contracts with the Department of Defense or other U.S. government intelligence or security agencies.
Notice 2018-31 states that specified national security contractors that are filing amended Form 8975 and Schedules A (Form 8975) in order to supersede an already-filed Form 8975 and Schedules A (Form 8975) need to take this action by April 20, 2018, if filing an amended federal income tax return on paper, or by May 25, 2018, if filing electronically to avoid the automatic exchange of the CbC reports with other tax administrations.
