What is a Country-by-Country Report?
A Country-by-Country (CbC) report is a requirement for multinational enterprises with a consolidated group revenue of €750 million or more. The report provides an overview of the global allocation of income, profits, taxes paid, and other economic indicators for each country where the group operates. This helps tax authorities identify and assess risks of tax avoidance. The CbC report must be submitted annually to the tax authority of the country where the multinational group's headquarters is located, which then shares it with other relevant tax authorities.
Why is a Country-by-Country Report important?
If multinational enterprises do not comply with this obligation, it can result in significant administrative penalties. Recently, the CbC report has become more important as it is used for the Pillar 2 Transitional Safe Harbor calculations. For the CbC report this means it should be ‘qualifying’, which requires a detailed review, but also the data quality is critical.
In recent years, our team of specialists has gained extensive experience in preparing, converting, and submitting such reports. We can assist you with the following CbC-related processes:
- Reviewing current CbC policies and data definitions used
- Performing CbC data extraction
- Conducting CbC data analysis based on OECD risk factors
- Preparing CbC reports, including conversion to XML and submission to the Tax Authorities
- Providing a template to be filled out, including review by our specialists, conversion to XML, and submission to the Tax Authorities
Additionally, we can assist with the analysis of the CbC report that serves as a 'qualifying CbC Report' for the safe harbor rules (Transitional Safe Harbours) of Pillar 2.
Country-by-Country Reporting Notification
We regularly publish an overview of the CbCR notification requirements. This overview includes all countries that have (currently) implemented definitive legislation regarding Country-by-Country Reporting (CbCR).
Need tax advice on Country-by-Country Reporting?
For tax advice on Country-by-Country Reporting (CbCR), contact one of our experts. They are happy to guide you through CbCR-related processes. They help with understanding the obligations, preparing the report, and complying with legal requirements to avoid fines and sanctions.
As of March 18, 2024, the use of eHerkenning (eRecognition) is necessary for confirming CbC notifications. We can assist in confirming notifications through eHerkenning. Additionally, we can guide the one-time application for eHerkenning.
We can also help with setting up a chain authorization needed to continue assisting you with the notification process.
Would you like more information about our Country-by-Country Reporting Services? Please contact one of our CbCR specialists.
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FAQ
Which data source should I use for my CbC Report?
The OECD allows multiple data sources, including data from the financial consolidation package, statutory financial statements, or data from internal management reports. For Pillar 2 Transitional Safe Harbours, slightly different requirements are set for the data source.
What information is captured in a CbC Report?
The CbCR report contains financial data for all jurisdictions, including revenues and profits, alongside a business description for all entities.
What are the deadlines for local CbC notifications?
For the overview refer to: CbCR notification overview Nov 2024
