What is country-by-country reporting?

Under BEPS Action 13, all large multinational enterprises (MNEs) are required to prepare a country-by-country (CbC) report with aggregate data on the global allocation of income, profit, taxes paid and economic activity among tax jurisdictions in which it operates. This CbC report is shared with tax administrations in these jurisdictions, for use in high level transfer pricing and BEPS risk assessments.

Why country-by-country reporting?

The United States is a member of the Organization for Economic Co-operation and Development (OECD). The OECD recommended country-by-country reporting requirements to address base erosion and profit shifting. The United States issued regulations to require country-by-country reporting by U.S. multinational enterprises (MNEs).

U.S. MNEs have to report certain financial information on a country-by-country basis. The Country-by-Country Report will be exchanged under bilateral Competent Authority Arrangements negotiated between the U.S. Competent Authority and Foreign Tax Administrations.

What is the threshold for country-by-country reporting?

Country-by-Country reporting requirements in Inclusive framework member jurisdictions

The table below contains information on the domestic legal frameworks for Country-by-Country (CbC) reporting around the world. It provides a high-level snapshot for tax administrations and MNE Groups as to the first reporting periods, availability of surrogate filing including in the parent jurisdiction, and local filing. This table contains the information received from members so far and will be updated as Inclusive Framework members continue to finalise their CbC reporting frameworks.

What is the EU public country-by-country reporting?

On December 1, 2021 the EU public Country-by-Country Reporting (CbCR) Directive was published in the EU Official Journal and entered into force. The objective of the Directive is to create corporate transparency and to enhance public scrutiny. The Directive should be transposed into national legislation by June 22, 2023. Member States are currently working on legislation to implement the Directive. Based on this draft legislation, differences have been detected between Member States (e.g. implementation date).

In summary, the Directive entails the following, reference is also made to the following link and this flyer.

What is country-by-country approach?

The increasing demand for greater transparency is changing the tax landscape for international business. The media, lobby groups and non-government organizations continue to question how much tax multinational companies are paying in countries they operated in and whether this is 'fair'. With this backdrop we are seeing new mandatory legislative requirements for Country-by-Country reports of financial tax data, including corporation tax, being introduced. The Country-by-Country (CbC) Reporting requirements proposed as part of the OECD Base Erosion and Profit Shifting (BEPS) project is now a reality and legislation is being introduced across the globe.

Country by Country Reporting under Action 13 of the OECD BEPS Action Plan

What is the penalty for CbCR in Germany?

13.4.3. Documentation Requirements

German transfer pricing documentation obligations were implemented in 2003. Effective 1 January 2016, Germany adopted BEPS Action 13 for transfer pricing documentation whereby taxpayers are required to prepare a Master file and a Local file. The CbC regulations are also effective since 1 January 2016 (with the exception of surrogate parent companies for which they are effective from 1 January 2017).

What is the EU public country by country reporting?

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What is the foreign account threshold?

A common question Americans with assets in foreign bank accounts ask us is if they need to file an FBAR (the actual form you’d file is FinCEN Form 114) or FATCA Form 8938. The answer is: You could have to file one, none, or both. While they both exist to report financial assets to the government, they differ in a number of ways. For starters, they get sent to different places — you send your FBAR to the Financial Crimes Enforcement Network and send Form 8938 to the IRS.

We’ll dive more into the individual FBAR and FATCA filing requirements below, but here’s the quick who-what-where-when comparing the two:

Is ESG reporting mandatory in Europe?

BRUSSELS, BELGIUM European flags are seen outside the European Commission on March 02, 2020 in ... [+] Brussels, Belgium. (Photo by Leon Neal/Getty Images)

On July 31, the European Commission adopted the European Sustainability Reporting Standards. The ESRS will standardize how companies within the European Union report climate change and other ESG related actions. They are set to go into effect on January 1, 2024.

What countries are deemed adequate by EU data protection?

The Swiss government has drafted a proposed list of countries that are approved to receive personal data transfers out of Switzerland. Japan and South Korea are excluded from the current and proposed lists, requiring businesses from those countries to abide by specific legal safeguards for such data transfers.

It is crucial that international data transfers always comply with the data transfer rules of the sending and receiving countries.

What is country-by-country reporting Deloitte?

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What are the two approaches to measure country risk?

Country-specific risks cover a wide spectrum. When you are ready to explore international investments, you can conduct country risk analyses via qualitative and quantitative assessments, or a combination of both. Quantitative analysis uses an objective analysis of ratios and statistics to determine risks. These assessments may include the debt-to-gross domestic product ratio or the beta coefficient of the Morgan Stanley Capital International (MSCI) index for a country. Qualitative analysis determines risk based on subjective analysis of things like political news and market rumors.

As a prospective international business investor, you can find quantitative information in rating agency reports, online sources and investment magazines like the Economist. Search Google News and other international news aggregators and financial publications for information you can uses in a qualitative assessment. Sovereign credit ratings, independent assessments of the creditworthiness of a country or sovereign entity, are essential resources for international investors – offering an easy way to analyze country risk. The three most-watched rating agencies are Standard & Poor's, Moody's Investor Services and Fitch Ratings.

Can you go to jail for tax evasion in Germany?

The majority of criminal tax proceedings end with a discontinuation pursuant to Section 153a of the German Code of Criminal Procedure (StPO). The defendant is given the option of ending the proceedings by paying a monetary deposit and allowing criminal charges to lapse.

As a rule, the Berlin tax authorities are in a position to discontinue proceedings pursuant to § 153a of the Code of Criminal Procedure up to an evasion amount of EUR 10,000.

What happens if you don't file tax return in Germany?

Penalty fees, regulated by §3 Paragraph 4 of the German Fiscal Code (Abgabenordnung), serve to “motivate” citizens to file their tax return before the deadline so that taxes can be assessed and paid on time. The “Act on the Modernization of the Taxation Procedure” of 2019 enabled lateness penalty fees to be more strictly regulated in accordance with section 152 of the German Fiscal Code, prior to this, whether and how you received a penalty fee was at the discretion of your local tax office (Finanzamt).

Taxpayers subject to a mandatory tax return must file by the deadline of July 31st following the tax year.

Please note: There is an exception to this rule for your 2020 tax return. Due to the Corona pandemic, the deadline was extended to October 31st, 2021. However, as October 31st falls on a Sunday, the deadline is pushed to the following working day, November 1st. Taxpayers of federal states that celebrate a public holiday (All Saints’ Day) on the 1st do not have to file until November 2nd. This applies to Baden-Württemberg, Bavaria, North Rhine-Westphalia, Rhineland-Palatinate, and Saarland.

There is one additional exception: Some taxpayers are not required to file if they were not required to do so in previous years and have a non-assessment certificate (Nichtveranlagungsbescheinigung). An example of someone this may apply to is a pensioner who suddenly finds themself above the basic tax-free allowance (Grundfreibetrag) due to an increase in pension contributions. In such a case, they would be requested in writing to submit a tax return and the submission deadline contained in the letter applies.

What foreign accounts need to be reported?

A U.S. person, including a citizen, resident, corporation, partnership, limited liability company, trust and estate, must file an FBAR to report:

a financial interest in or signature or other authority over at least one financial account located outside the United States if

the aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported.

The FBAR is an annual report, due April 15 following the calendar year reported. You’re allowed an automatic extension to October 15 if you fail to meet the FBAR annual due date of April 15. You don’t need to request an extension to file the FBAR. See FinCEN’s websitePDF for further information.

If you’re affected by a natural disaster, the government may further extend your FBAR due date. It’s important that you review relevant FBAR relief notices for complete information.

The government continues to extend the FBAR due date for certain employees or officers with signature or other authority over, but no financial interest in certain foreign financial accounts. Review important details about this extension in the most recent notice for certain financial professionals.

What is country-by-country reporting?

Country-by-Country Reporting: Handbook on Effective Tax Risk Assessment supports countries in the effective use of CbC Reports by incorporating them into a tax authority's risk assessment process.

Are country-by-country reports exchanged under competent authority arrangements?

Country-by-country reports are exchanged under competent authority arrangements. This table details their agreement status by jurisdiction. OECD final report on transfer pricing documentation and country-by-country reporting. Additional OECD guidance on the global implementation of country-by-country reporting.

What are the final regulations for annual country-by-country (CBC) reporting?

Final regulations for annual country-by-country (CbC) reporting. Guidance for ultimate parent entities of U.S. multinational enterprise groups about filing a Form 8975, Country-by-Country Report, for early reporting periods. This revenue procedure discusses the timing and manner of these early filings.

Does OECD country-by-country reporting address tax avoidance?

According to commentators, the OECD Country-by-Country Reporting fails to effectively address tax avoidance, especially as the OECD rules do not require the reports to be made public. The responsibility remains with individual countries to go further and require disclosure of information on obscure tax structures of MNEs.