Bill C-29 was passed by the House of Commons on 15^th December 2016. The Bill provides the final legislation to implement country-by-country (CbC) reporting. The final legislation formalizes the introduction of section 233.8 to the Income Tax Act, which establishes CbC reporting requirements. This legislation upholds the EUR 750 million or more consolidated revenue threshold in a fiscal year for multinational enterprise (MNE) group. This threshold was proposed by the Organization for Economic Cooperation and Development (OECD).

A Canadian resident company that is the parent company of a corporate group is required to file the CbC report.

The  term  “MNE  Group”  means any  group  consisting of  two  or  more business organizations with tax  residence  in  different  jurisdictions, or includes  an enterprise  that  is tax resident  in  one  jurisdiction  and  is  subject  to  tax  with respect  to the business  carried  out  via  a  permanent  establishment  in  another jurisdiction, provided that it is not an excluded MNE group.

The report must contain details of group revenue, distinguishing between related and unrelated parties; accounting results before corporate income tax (or similar taxes); and corporate tax paid or accrued, including withholding tax. The average number of employees in each entity must be stated.

In accordance with the final legislation the CbC report must be filed before the later of 12 months after the ultimate parent’s fiscal year end or within 30 days of a notification by the Minister to an MNE entity of a “systemic failure”. Penalties are established in the final legislation for failure to comply with the new reporting requirements. The amount of penalties can be C$12,000 or C$24,000 per report for failure to deliver foreign-based information applying to the CbC report.