Country-by-Country Reporting: Update on Implementation

On June 8, 2015, the OECD released the Country-by-Country (“CbC”) Reporting Implementation Package intended to facilitate a consistent implementation of the new transfer pricing standards under the revised Chapter V – Documentation of the OECD’s Transfer Pricing Guidelines. We provide below a summary of the recent developments, including measures, announcements or statements by tax authorities in various countries, such as US, UK, Australia, Spain, Poland and Canada.

The CbC reporting will require Multinational Enterprises (“MNEs”) to provide aggregate information annually, in each jurisdiction where they do business, relating to the global allocation of income and taxes paid, together with other indicators of the location of economic activity within the MNE group, as well as information about which entities do business in a particular jurisdiction and the business activities each entity engages in.

The new implementation package consists of model legislation requiring the ultimate parent entity of an MNE group to file the CbC report in its jurisdiction of residence, including backup filing requirements when that jurisdiction does not require filing. The package also contains three Model Competent Authority Agreements to facilitate the exchange of CbC reports among tax authorities of the different countries.

The new OECD documentation standards consist of a three-tiered reporting structure including a Master file, Local files and the CbC report. As noted below, several countries have already taken measures or announced their intent to implement the proposed CbC reporting standards.

United States

The United States Treasury Department announced plans to implement the CbC reporting requirements for fiscal years beginning in 2016 as set out in the guidance issued by the OECD. Treasury officials have stated that they have sufficient authority under existing law to implement the CbC reporting requirements, along with other aspects of the agreed-upon transfer pricing documentation standards proposed by the OECD.

United Kingdom

The UK Government was the first to announce in September 2014 its intentions to implement the CbC reporting template. The subsequent legislation enabling such regulation received royal assent in the Finance Act of 2015. The CbC requirements are expected to apply for fiscal years commencing on or after January 1, 2016.


The Government of Australia has announced in their May 12, 2015 budget its intention to implement the OECD new transfer pricing documentation standards from January 1st, 2016. The Australian Taxation Office (ATO) expects to receive all three reports (i.e. Master, Local and CbC) for MNEs with global revenue of $1 billion or more.


On March 18, 2015, Spain's Ministry of Finance published a draft requirement for CbC reporting as part of their new Corporate Income Tax Regulations. According to this draft, ultimate parent companies resident in Spain with net revenues equal to or exceeding 750 million Euros must file a CbC report in line with the new OECD transfer pricing standards. Further, an obligation to maintain a Group Master File at the disposal of the Spanish tax authorities will be applicable for taxpayers belonging to a group whose net revenues are equal to, or higher than 45 million Euros.


Poland published draft amendments to its tax legislation on April 28, 2015, proposing significant changes to transfer pricing documentation requirements which are expected to enter in force from January 1, 2016 onward. The proposed changes include requirements for the preparation of a Master File for taxpayers whose annual revenues or expenses exceed 20 million Euros and for the filing of the CbC report for MNEs with consolidated revenues exceeding 750 million Euros. 


Canada has not yet officially announced its intention to implement the CbC reporting requirements. However, in its recent Federal Budget, the Canadian government reaffirmed its commitment to the Base Erosion and Profit Shifting (“BEPS”) project, from which the CbC requirements originated. As a result, we expect that the CRA will release guidance or pronouncements in the coming months given the OECD’s recommendation for countries to implement the new documentation standards from January 1, 2016 onward.

How we can help:

Richter can assist you with the preparation of the Country-by-Country reporting requirements, as follows:

  • Assistance with information gathering and analysis of the required information;
  • Assessment of readiness of the IT systems in conjunction with your company’s IT department;
  • Assessment of gaps between the existing transfer pricing  documentation (global and local) and the new documentation requirements;
  • Assessment of possible opportunities and risks related to the MNE’s global corporate organizational structure and intercompany transactions.

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