On December 29, 2017, Hong Kong gazetted the Inland Revenue (Amendment) (No. 6) Bill, 2017, which provides for an implementation framework for country-by-country (CbC) reporting in Hong Kong.
In Hong Kong, the requirement for filing a CbC report applies to a MNE Group with an annual consolidated group revenue exceeding HKD6.8bn. The deadline for filing a CbC return is 12 months after the end of the relevant accounting period or the date specified in the assessor’s notice, whichever is the earlier.
According to the law, the primary obligation of filing a CbC return is on the ultimate parent entity resident in Hong Kong and not on any other constituent entities resident in Hong Kong. Hong Kong entities whose ultimate parent entities are not resident in Hong Kong are also subject to a secondary obligation of filing a CbC return upon fulfilment of certain conditions.
The CbC return is required to be filed for each accounting period beginning on or after January 1, 2018. Every Hong Kong entity is required to make a notification containing information relevant for determining the obligation for filing a CbC return within three months after the end of the relevant accounting period.
CbC reporting is part of a three-tiered approach to transfer pricing documentation (along with “master” and “local” files) developed under BEPS Action 13.