The OECD released an updated document on common errors by multinational enterprises (MNEs) in preparing Country-by-Country (CbC) reports on 22 May 2025.
The Organisation for Economic Co-operation and Development (OECD) released an updated document on common errors by multinational enterprises (MNEs) in preparing Country-by-Country (CbC) reports on 22 May 2025. This latest report builds on the initial version from November 2019.
The new report includes 28 recurring errors identified by tax administrations and common issues with invalid or prohibited characters in the CbC reporting XML schema.
Country-by-Country (CbC) reports contain valuable information on the global allocation of the income, taxes paid and the location of economic activity among tax jurisdictions in which an MNE group operates, for use in a high level transfer pricing risk assessment, assessment of other BEPS-related risks, and economic and statistical analysis, if appropriate. However, this information can only be used effectively for these purposes if the data contained in CbC reports prepared by MNE groups is robust and accurate.
Tax administrations have encountered several concerns with the data in CbC reports filed to date, and the most common of these are described in the tables below. MNE groups within the scope of CbC reporting should review these descriptions and ensure that these errors are not repeated in CbC reports they are preparing. This is critical concerning errors concerning missing Tax Identification Numbers or the inclusion of incorrect Tax Identification Numbers in Table 2, as this can lead to specific difficulty for a tax administration using the data in a CbC report effectively.
To reduce the risk of the errors below occurring, tax administrations are encouraged to share this document with taxpayers and advisers to ensure they are aware that CbC reports prepared including these errors are incorrect and must be amended.
Tax administrations have introduced different processes to identify errors that do occur in filed CbC reports, including:
- automated validations undertaken at the point a CbC report is filed using the CbC reporting XML schema format, which prevent an MNE group from filing a CbC report containing certain errors (including Tax Identification Numbers in an invalid format, duplicated Tax Identification Numbers and excessive or inappropriate use of “NOTIN”);
- automated or manual validations undertaken after a CbC report is filed but before it is exchanged; and
- automated or manual validations undertaken by a receiving jurisdiction after a CbC report is exchanged.
Where a tax administration identifies that a CbC report filed with it contains errors (including but not limited to those described in the document), whether this arises from validations undertaken by itself or where it is informed of these errors by a jurisdiction that received the CbC report on exchange, it should require these errors to be corrected by the Reporting MNE.
Common errors related to the XML schema format of Country-by-Country (CbC) reports are also outlined in this document. To be successfully exchanged, CbC reports must comply with the prescribed XML schema format, which does not allow certain invalid characters such as &, <, >, ‘, and “. These characters must be replaced with their corresponding predefined character codes to ensure validation.
Several MNE groups have submitted or attempted to submit CbC reports containing these invalid characters or incorrect replacements, resulting in validation errors. To avoid such issues, MNE groups should be encouraged to use the correct specified characters listed in the document.
Furthermore, certain characters are entirely prohibited under the XML schema and do not have any permitted replacements. Including these characters in CbC reports is not allowed and will cause the report to fail validation. MNE groups should be advised to avoid using any of the prohibited characters listed in the document.
