22/03/2016 – In a continued effort to boost transparency in international tax matters, the OECD has today released its standardised electronic format for the exchange of Country-by-Country (CbC) Reports between jurisdictions – the CbC XML Schema – as well as the related User Guide. The CbC XML Schema is part of the OECD’s work to ensure the swift and efficient implementation of the BEPS measures, endorsed by G20 Leaders as part of the final BEPS package in November 2015.
The OECD/G20 BEPS Project sets out 15 key actions to reform the international tax framework and ensure that profits are reported where economic activities are carried out and value created. The BEPS Project delivers solutions for governments to close the gaps in existing international rules that allow corporate profits to “disappear” or be artificially shifted to low or no tax environments, where companies have little or no economic activity.
CbC Reports, to be electronically transmitted between Competent Authorities in accordance with the CbC XML Schema, will assist tax administrations in obtaining a complete understanding of the way in which Multinational Enterprises (MNEs) structure their operations, by annually providing them with key information on the global allocation of income and taxes paid, together with other indicators of the location of economic activity within the MNE group. It will also cover information about which entities do business in a particular jurisdiction and the business activities each entity engages in.
The information to be included in the CbC Report will be collected by the country of residence of the Reporting Entity for the MNE group, and will then be exchanged under the relevant international exchange of information agreement, in particular the Multilateral Competent Authority Agreement on the Exchange of CbC Reports (the "CbC MCAA"), in the format of the CbC XML Schema. First exchanges of CbC Reports will start in 2018, with information on the year 2016. The Country-by-Country reporting template does not apply to groups with annual consolidated revenue in the immediately preceding fiscal year of less than EUR 750 million.
The CbC XML Schema User Guide further explains the information required to be included in each data element to be reported. It also contains guidance on how to make corrections of data element within a file.
While the CbC XML Schema has been primarily designed to be used for the automatic exchange of CbC Reports between Competent Authorities, the CbC XML Schema can also be relied upon by Reporting Entities for transmitting the CbC Report to their tax authorities, provided the use of the CbC XML Schema is mandated domestically.
For further information on the OECD’s work on Country-by-Country reporting see: www.oecd.org/tax/automatic-exchange/about-automatic-exchange/country-by-country-reporting.htm.
Media queries should be directed to Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration (+33 6 26 30 49 23), or Achim Pross, Head of the International Co-operation and Tax Administration Division (+33 1 45 24 93 51).