Hong Kong Inland Revenue Department has clarified that starting from April 2019, the Department will not accept voluntary filing of a country-by-country (CbC) report for an accounting period ended on or before March 31, 2018.
Under section 58E(2) of the Inland Revenue Ordinance, a Hong Kong ultimate parent entity may voluntarily file a CbC report in respect of an accounting period beginning on or after January 1, 2016, but before January 1, 2018, by the filing deadline, which is the date on which a period of 12 months after the end of the accounting period expires.
The Department further noted that Hong Kong shall exchange CbC reports with treaty partners within 18 months after the end of an accounting period commencing in 2016, or 15 months after the end of an accounting period commencing in 2017.
CbC reporting is part of a three-tiered approach to transfer pricing documentation (along with “master” and “local” files) developed under base erosion and profit shifting Action 13.
On December 29, 2017, Hong Kong gazetted the Inland Revenue (Amendment) (No. 6) Bill, 2017, which provides for an implementation framework for CbC reporting in Hong Kong.
On March 5, 2018, the Hong Kong Government launched an online portal to enable Hong Kong entities to file their country-by-country (CbC) reports.
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