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Country by country reporting for MNCs

USA

It has been announced the USA will adopt country-by-country reporting despite concerns over confidentiality and privacy. Taxand USA looks at the implications for multinational businesses.

It appears that the U.S. will follow the OECD’s filing threshold, requiring reporting for multinational groups with over €750 million (approximately US$ 840 million) in consolidated worldwide revenue. We expect the U.S. country-by-country(CbC) template to require substantially the same information as the OECD’s published template, which requires disclosure of revenues, profits, income taxes paid, stated capital and accumulated earnings, number of employees, and tangible assets other than cash or cash equivalents, by tax jurisdiction.

Last Thursday’s announcement revealed that Treasury hopes to implement CbC reporting relatively quickly, with the first reports due by December 2017. Guidance from the OECD has ndicated that the reporting be required for fiscal years commencing after 1 January 2016, a date that will be here sooner than many may like to admit.

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Quality tax advice, globally

Also published in Thomson Reuters' TaxNet Pro

Taxand's Take

The global overview provided by these reports may highlight transfer pricing mismatches across a groups’ global profile. Careful consideration of existing structures will now have to be paid, so that challenges from the IRS, or from other tax authorities committed to CbC, can be anticipated and mitigated.

Taxand's Take Author

Marc Alms
Global TP & business restructuring service line co-leader
USA

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