Base erosion and profit shifting

Country-by-Country Reporting: Handbook on Effective Tax Risk Assessment

 

Country-by-Country Reporting Handbook on Effective Tax Risk Assessment

Published: 29 September 2017

 

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About

Country-by-Country (CbC) Reporting is one of the four minimum standards under the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project to which over 100 countries have committed, covering the tax residence jurisdictions of nearly all large MNE groups. Where CbC Reporting is implemented effectively, and in line with the conditions set out in the BEPS Action 13 Report, it will give tax authorities unprecedented access to information on the global allocation of an MNE group's revenue, profit, tax and other attributes for high level transfer pricing risk assessment and the assessment of other BEPS-related risks.

This handbook supports countries in the effective use of CbC Reports by incorporating them into a tax authority's risk assessment process, including:

  • a description of the role of tax risk assessment in tax administration, the core characteristics of an effective risk assessment system, and examples of the approaches used in different countries;
  • an outline of the information contained in CbC Reports, and the potential advantages CbC Reports have over data from other sources;
  • consideration of the ways in which CbC Reports can be incorporated into a tax authority's risk assessment framework and a description of some of the main potential tax risk indicators that may be identified using CbC Reports;
  • a description of some of the challenges that may be faced by a tax authority in using CbC Reports for tax risk assessment and how some of these may be dealt with;
  • an outline of some of the other sources of data that may be used by a tax authority alongside CbC Reports; and
  • an overview of how the results of a tax risk assessment using CbC Reports may be used and the next steps that should be taken.

 

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