On 5 December 2016 the Inclusive Framework, set up to enhance cooperation between countries, released two new documents in relation to the implementation of Country-by-Country (CbC) reporting under the OECD/G20 project on base erosion and profit shifting (BEPS). The documents are intended to give more certainty to taxpayers and tax administrations on how CbC reporting is to be implemented.

More than a hundred countries are involved in the Inclusive Framework and they are involved in the development of the monitoring process for the four minimum standards and the review mechanisms for other parts of the BEPS package. The inclusive framework is also involved in developing various toolkits to assist developing countries in BEPS implementation. The inclusive framework allows these countries to provide input to the work on toolkits and to impact the remaining BEPS standard-setting work.

Key details of domestic legal frameworks for CbC reporting

The details on legal frameworks to be set up by countries for CbC reporting include the status of the legislation; the first reporting periods; the availability of surrogate filing and voluntary filing; and the issue of whether local filing can be required. This guidance will be updated as the members of the Inclusive Framework continue to develop their legislation.

More Information will be made available at a later time in relation to the Qualifying Competent Authority Agreements (QCAA). These agreements are being drawn up to enable the international exchange of CbC reports between tax administrations.

Additional interpretive guidance on the CbC reporting standard

This guidance concerns situations where a notification to the tax administration may be required to identify the reporting entity within the multinational group. This situation is covered by Article 3 of the Model Legislation in the report on BEPS Action 13. The guidance issued by the Inclusive Framework confirms that if these notifications are needed countries have flexibility in determining the due date for receipt of the notifications.

This flexibility may be necessary during the transition period where countries are still completing their work on the implementation of CbC reporting. Multinational groups may not yet have the required information to submit the notifications. The guidance now issued confirms that countries may consider other transitional relief for multinational groups required to send in the notifications.

Further guidance is to be issued as required to assist the global implementation of CbC reporting.