Austria: | BEPS Related Compliance Master file information: Austria has introduced a requirement for a master file for constituent entities resident in Austria if their turnover in the previous two fiscal years exceeded €50 million in each year. There is no obligation to prepare the master file if the turnover of the constituent entities is below €50 million for two consecutive years. The master file generally has to be prepared for fiscal years starting from 1 January 2016. In cases where a constituent entity was officially designated by notice as the surrogate parent entity, the submitted information can refer to fiscal years starting from 1 January 2017. Master file will contain information regarding description of the group’s capital structure, transfer pricing policy and significant intangible assets utilized. Local file information: Austria has introduced a requirement for a local file for constituent entities resident in Austria if their turnover in the previous two fiscal years exceeded €50 million in each year. There is no obligation to prepare the local file if the turnover of the constituent entities is below €50 million for two consecutive years. The local file generally has to be prepared for fiscal years starting from 1 January 2016. A local file will contain specific transfer pricing information for each relevant country of operation. General rule for Country by Country reporting: Austria has introduced Country-by-Country (CbC) reporting requirement for domestic entities with consolidated group revenue of at least €750 million for the preceding fiscal year. The CbC report generally has to be prepared for the fiscal years starting from 1 January 2016. The average number of employees in each entity must be reported. The CbC report must be submitted within twelve months after the end of the tax year. Parent company: The Country-by-Country (CbC) report must be submitted by a company resident in Austria that is the parent company of a corporate group. A parent company is a company that is not a subsidiary of any other company in Austria. Group definition: The country by country reporting requirement applies where the consolidated group revenue in the preceding year is at least €750 million. Profits and tax paid: The report must cover group revenue, distinguishing between related and unrelated parties; accounting results before corporate income tax (or similar taxes); and corporate tax (or similar taxes) paid or accrued, including withholding tax. Penalty for non-compliance: If the CbC report is not filed in time due to gross negligence or intent, or the required items in the table in appendices 1 to 3 of the law are not filed or incorrectly filed, the government bill stipulates penalties of up to €25,000 for gross negligence and up to €50,000 for intent. See the story in Regfollower |
USA: | General rule for Country by Country reporting: United States has introduced country-by-country reporting requirement for certain U.S. persons that are the ultimate parent entity of a multinational enterprise group that has annual revenue for the preceding annual accounting period of $850 million or more. The Treasury Department and IRS released for publication in the Federal Register final regulations (T.D. 9773) to implement CbC reporting as per final BEPS report. The final regulations apply to reporting periods of ultimate parent entities that begin on or after the first day of a taxable year of the ultimate parent entity that begins on or after publication of the final regulations in the Federal Register. Number of employees for each tax jurisdiction of residence of the U.S. MNE group must be reported. The CbC report must be filed with the ultimate parent entity’s income tax return for the taxable year, in or with which the reporting period ends, on or before the due date (including extensions) for filing that person’s income tax return or as otherwise prescribed by Form 8975. Parent company: The Country-by-Country (CbC) report must be submitted by a company resident in U.S. that is the ultimate parent entity of a corporate group. A parent company is a company that is not a subsidiary of any other company in U.S. Group definition: The country by country reporting requirement applies where the consolidated group revenue in the preceding year is $850 million or more. Profits and tax paid: The report must cover group revenue, distinguishing between related and unrelated parties; accounting results before corporate income tax (or similar taxes); and corporate tax (or similar taxes) paid or accrued, including withholding tax. Penalty for non-compliance: The penalty rules under section 6038 generally apply, including reasonable cause relief for failure to file. If the CbC report is not filed in time a penalty of $10,000 will be applicable for each annual accounting period with respect to which such failure exists. See the story in Regfollower |
Greece: | Documentation requirement: As per the draft bill submitted to the parliament on 13 July, 2016, The General Secretary of Public Revenue may exempt very small enterprises from the submission of transfer pricing documentation. Documentation deadline: As per the draft bill, the documentation has to be submitted at the deadline set for filing the income tax returns. The new deadline applies to documentation pertaining to transactions executed after 1 January 2015. See the story in Regfollower |
China: | BEPS Related Compliance Master file information: China issued Bulletin 42 to introduce a requirement for a master file for MNC group resident in China if their annual inter-company transaction amount exceeds RMB 1 billion. The master file requirement is effective from fiscal year 2016. A master file shall disclose the relevant MNC group’s overall global business situation, including organizational structure, business description, intangible structure, financing activities, financial and tax status of the group. A master file shall be completed within 12 months after the end of the fiscal year of its ultimate parent company. Local file information: China has introduced a requirement for a local file by a Chinese enterprise, if it exceeds any of the thresholds in a particular year like Inter-company purchase/sale of tangible goods of above RMB 200 million (about USD30 million); or Transfer of financial assets of above RMB 100 million (about USD15 million); or Transfer of intangible assets of above RMB 100 million (about USD15 million); or Other related party transactions of above RMB 40 million (about USD 6.2 million). The local file requirement is effective from fiscal year 2016. A local file shall disclose the Chinese enterprise’s business operation and inter-company transactions, and also include a detailed transfer pricing analysis. A local file and a special file shall be completed by 31 June after the calendar year. General rule for Country by Country reporting: China has introduced Country-by-Country (CbC) reporting requirement stating from year of 2016 for domestic entities which is a Chinese resident enterprise, which is the ultimate controlling enterprise of a MNC group, and records a total revenue above RMB 5 billion (about USD850 million) in its last year consolidated financial statement; or a Chinese resident enterprise that is designated by a MNC group to be the reporting enterprise for filing the CbC report. The average number of employees in each entity must be reported. The CbC report must be submitted within twelve months after the end of the tax year. Parent company: The Country-by-Country (CbC) report must be submitted by a ultimate parent company resident in China. A parent company is a company that is not a subsidiary of any other company in China. Group definition: The country by country reporting requirement applies where the consolidated group revenue in the preceding year is above RMB 5 billion (about USD850 million). Profits and tax paid: The report must cover group revenue, distinguishing between related and unrelated parties; accounting results before corporate income tax (or similar taxes); and corporate tax (or similar taxes) paid or accrued, including withholding tax. Penalty for non-compliance: Taxpayers’ legal responsibility to comply with the regulation has not changed. If an enterprise fails to file the reporting forms on related-party transactions or contemporaneous documentation on time, the tax authorities may require the enterprise to make a correction, and may impose a penalty of no more than RMB 2,000. For serious violations, such as continued noncompliance, penalties between RMB 2,000 and RMB 10,000 could be imposed. See the story in Regfollower |
Belgium: | BEPS Related Compliance Master file information: Belgium issued regulation to introduce a requirement for a master file for MNC group resident in Belgium if it satisfies one of the three thresholds like a sum of operational and financial income of €50 million; or a balance sheet total of €1 billion; or an annual average of employees of 100 full-time employees. The master file requirement is effective from fiscal year 2017. Master file will contain information regarding description of the group’s capital structure, transfer pricing policy and significant intangible assets utilized. A master file shall be completed within 12 months after the end of the fiscal year of its ultimate parent company. Local file information: Belgium issued regulation to introduce a requirement for a local file for MNC group resident in Belgium if it satisfies one of the three thresholds like a sum of operational and financial income is of €50 million; or a balance sheet total of €1 billion; or an annual average of employees are of 100 full-time employees. The local file requirement is effective from fiscal year 2017. The Local file will have to be provided in a specific format consisting of two parts. One part of the Local file form will contain some general information that will have to be completed and filed by all companies or permanent establishments satisfying one of the three thresholds (listed above). The second part (a more detailed one, providing mainly qualitative and quantitative information on the various sorts of intercompany transactions) of the form will only be completed and filed by companies or permanent establishments that have cross-border intragroup transactions exceeding in total a value of €1 million. In instances when the company or permanent establishment includes more than one business unit, the second part of the form will have to be completed and filed per business unit exceeding the €1 million threshold. General rule for Country by Country reporting: Belgium has introduced Country-by-Country (CbC) reporting requirement in compliant with the OECD and EU provisions for domestic entities with consolidated group revenue of at least €750 million for the preceding fiscal year. The CbC report generally has to be prepared for the fiscal years starting from 1 January 2017. The average number of employees in each entity must be reported. The CbC report must be submitted within twelve months after the end of the tax year. Parent company: The Country-by-Country (CbC) report must be submitted by a ultimate parent company resident in Belgium. A parent company is a company that is not a subsidiary of any other company in Belgium. Group definition: The country by country reporting requirement applies where the consolidated group revenue in the preceding year is at least €750 million. Profits and tax paid: The report must cover group revenue, distinguishing between related and unrelated parties; accounting results before corporate income tax (or similar taxes); and corporate tax (or similar taxes) paid or accrued, including withholding tax. Penalty for non-compliance: Companies and permanent establishments required to satisfy the new rules and that fail to satisfy the reporting and filing requirements will be subject to penalties ranging from €1,250 to €25,000, as from the second infringement. See the story in Regfollower |
Colombia: | Specific transfer pricing compliance: The National Tax Authority issued Administrative Regulation 50 on 16 June 2016 explaining the procedure and technical conditions for filing the transfer pricing informative return. See the story in Regfollower |
Finland: | BEPS Related Compliance Master file information: The Ministry of Finance released for public comments, a draft bill to introduce master file requirement as per the recommendations of the OECD’s base erosion and profit shifting (BEPS) Action 13. Master file will contain information regarding description of the group’s capital structure, transfer pricing policy and significant intangible assets utilized. If this provision is enacted, it will be applicable to the fiscal year beginning from 1 January 2017. Local file information: The Ministry of Finance released for public comments, a draft bill to introduce local file requirement as per the recommendations of the OECD’s base erosion and profit shifting (BEPS) Action 13. A local file will contain specific transfer pricing information for each relevant country of operation. General rule for Country by Country reporting: The Ministry of Finance released for public comments, a draft bill to introduce country-by-country (CbC) reporting as per the recommendations of the OECD’s base erosion and profit shifting (BEPS) Action 13. Multinational groups where the ultimate parent company is a resident in Finland would be required to submit country-by country reports if the consolidated turnover exceeds €750 million. The government intends for the provisions to be enacted and effective beginning 2017. See the story in Regfollower |
Cyprus: | BEPS Related Compliance General rule for Country by Country reporting: The Ministry of Finance announced its intention to amend the country’s legislative framework in relation to country-by-country (CbC) reporting, following the EU Directive amending Directive 2011/16/EU. The amendments are expected to be in line with the recommendations of Action 13 of the OECD final reports on Base Erosion and Profit Shifting (BEPS). See the story in Regfollower |
Korea Republic: | BEPS Related Compliance Master file information: As per the draft legislation issued by the South Korea’s Ministry of Strategy and Finance, the required filing deadline of Master file would now be within 12 months of the fiscal year-end. Local file information: The draft measures issued by the South Korea’s Ministry of Strategy and Finance would exempt some MNEs from preparing the Local file. This exemption would apply for MNEs that have relevant transactions covered by an already completed APA and considered to be at an arm’s length price. General rule for Country by Country reporting: Under the draft legislation, the CbC report has been added to the scope of the “Combined Report of International Transactions” (CRIT). The CbC report would be required for any multinational entity (MNE) with consolidated sales of over one trillion KRW, and would be required to be submitted by the ultimate parent company of the MNE. If the parent company resides in a country that does not require a CbC report, or does not facilitate the exchange of the CbC report, it would be the obligation of the domestic entity to submit the CbC report. See the story in Regfollower |
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