Country by Country Reporting - Wider and deeper? Your chance to have a say

Tax compliance for multinational businesses has changed hugely in the last few years - not least because tax authorities now have access to levels of data that would have been unimaginable a few years ago. And they are going to get more. The Organisation for Economic Co-operation and Development (OECD) has launched a public consultation and review of Country-by-Country Reporting (CbCR). The proposals would expand the powers of tax authorities to collect and exchange even more data from more taxpayers. 

However, the consultation provides a rare opportunity for businesses to have a say on the policy direction of what is an onerous and important obligation for many large multinationals, but the window of opportunity is short - responses are required by 6th March 2020.


The OECD released its final report on Action 13 as part of its Base Erosion Profit Shifting (BEPS) Action Plan in October 2015. Action 13 introduced a standardized, three-tiered approach to transfer pricing documentation for multinational enterprises (MNEs), consisting of a master file, a local file, and a CbC report. The OECD pledged to undertake a review of the standard introduced by Action 13 by the end of 2020, which would focus on issues such as the threshold for compliance and whether the reporting of additional or different data was desirable.

The CBCR rules have been introduced in many countries in recent years following the publication of the BEPS Action plan. The main aim is to provide information from multinational businesses to help tax authorities undertake corporate tax risk assessments. This approach is now being reviewed to see if it can be improved and the consultation offers an opportunity for multinationals and other stakeholders to have a say in the ongoing development of CbCR.

The consultation follows other useful CbCR publications from the OECD. It published a summary of common errors businesses make when preparing CbC reports last November, and in the following month a summary of CbC reporting notification requirements. Previously it has published guidance for tax administrations on using CbC reports for risk assessing purposes. It is important to note that the OECD is developing, a CbC Tax Risk Evaluation and Assessment Tool (TREAT) to assist tax administrations in reading and interpreting CbC reports.

Key proposals

The OECD has listed 43 questions to guide stakeholders to particular key issues, however, respondents are not restricted by these and may comment on relevant matters as outlined in the proposals. The consultation covers a multitude of issues some of which will be considerably more significant than others.

For example, there is a question as to whether the Table 1 data required for a CbCR should be presented by entity rather than by country. If it is expanded to entities, this could increase the compliance burden considerably as many businesses have multiple entities in a single country.

There is also a fundamental question regarding the threshold for compliance and in particular whether it should be reduced from €750m. This has been discussed by various policymakers (including the European Union) a number of times and could bring many more taxpayers within the rules if the threshold were to be lowered.

The issue of how much information should be required is also likely to be an important issue for many businesses. The OECD is interested in views on whether additional columns should be added to Table 1, for example, should data on royalties, interest or service fees be reportable? Again this could significantly increase the compliance burden for taxpayers and increase the risk of tax authority challenge.

The OECD consultation also asks whether gains from investments should be included in the calculation of the €750m threshold test. If they are to be included in future CbC reports, it would bring many investment funds within the CBCR rules.

Wider comments being sought by the OECD include the experience of businesses in complying with CbCR, how the approach is working and also changes that might be introduced to its future scope and content. This is an important issue for large businesses given that the completion of a CBCR can be an onerous compliance burden and can affect how a multinational is risk assessed by a tax authority.

Have your say

The OECD has asked stakeholders to submit their comments on all aspects of the BEPS Action 13 report and particularly on the questions raised in the Consultation Document. All comments on the Consultation Document will be made public on the OECD website. There will also be a public consultation meeting on 17 March in Paris.

Read the OECD consultation

Keep up to date

Whether or not your business responds to the consultation, if it is within the rules at present (or may be in future) you should keep up to date with developments over the coming months as they could have a significant impact your businesses compliance and risk strategies. This is especially important for businesses with a footprint in the EU as other important data gathering reporting obligations such as DAC 6 are currently being introduced or will be in the near future.

BDO will be making a formal response to the consultation and it will be published here in due course. In the meantime, if you have any comments or questions on the OECD proposals, please contact


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Partner - Transfer Pricing, United Kingdom

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