60 out of 90 countries have introduced tax legislation to implement country-by-country (CbC) reporting obligation for multinational enterprises (MNEs), in line with Action 13 of the base erosion and profit shifting (BEPS) project, according to a May 24 OECD report.
The first annual peer review of the CbC reporting initiative – which reflects implementation of the initiative as of January 2018 – reveal that in countries where legislation is in place, the implementation of CbC reporting has been found largely consistent with the BEPS Action 13 minimum standard. The remaining jurisdictions are working towards finalizing their domestic legal framework with the support of the OECD, the report notes.
Some jurisdictions have received recommendations for improvement on certain specific aspects of their legislation and work has already begun to bring the provisions concerned in line with the standard, the OECD said.
CbC reporting is part of a three-tiered approach to transfer pricing documentation (along with “master” and “local” files) developed under BEPS Action 13. These reports are to be automatically exchanged between tax administrations under relevant exchange arrangements.
According to the OECD, there are over 1,400 bilateral exchange relationships in place between jurisdictions committed to exchanging CbC reports, with first exchanges scheduled to take place this month.
Following the first exchanges of CbC reports, work will begin on analyzing how CbC reports are used by tax administrations in assessing transfer pricing and other BEPS-related risks, the OECD noted.
Commenting on the release of the report, Pascal Saint-Amans, director of the OECD Centre for Tax Policy and Administration, said: “The peer review outcomes and the launch of the global exchange of CbC reports in June shows that the BEPS measures are being implemented rapidly, consistently, and globally.”