The Organisation for Economic Co-operation and Development (OECD) released its final report on Action 13, Transfer Pricing Documentation and Country-by-Country Reporting’ on 5 October 2015. This final report included: (1) Template for Country-by-Country (CbC Reporting) and (2) Revised standards for transfer pricing documentation.
The CbC Reporting has created a ‘BEPS wave’ in the industry and has become an area of focus for tax practitioners, with many countries releasing new legislation and reporting requirements for multinational enterprises (MNE).
A recent survey published by TP Week and conducted by The International Tax Review indicated that 78% of tax professionals interviewed consider transfer pricing documentation and CbC Reporting as the priority within the BEPS action plan.
With this in mind, below is our guide to what you need to know about CbC Reporting.
The CbC Reporting is a new compliance requirement that compels MNEs to disclose new information to tax authorities about the Group and the local entities.
The CbC Reporting is divided into three tables as follows
The CbC Reporting means tax authorities will have access to information that they have not seen before. This may result in tax authorities focusing on broader aspects and structures as opposed to concentrating on the local entity only. More information may also increase tax scrutiny and additional questions about the MNE Group in tax reviews and audits.
For more information about the CbC Reporting and how can affect your company, please contact our offices in Australia or Singapore.
Transfer Pricing Solutions on firstname.lastname@example.org www.transferpricingsolutions.com.au or Transfer Pricing Solutions Asia on email@example.com www.transferpricingsolutions.asia
 Australia, Austria, Belgium, Chile, Costa Rica, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Japan, Liechtenstein, Luxembourg, Malaysia, Mexico, the Netherlands, Nigeria, Norway, Poland, Portugal, Senegal, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland and the UK.
Singapore is often a preferred location for setting up headquarters as the door to conduct business in Asia. The IRAS has released its views on how Singapore HQ's should plan and implement their transfer pricing framework. Want to know more? Read our article with our views on IRAS TP Guidelines for Singapore HQs.
The Malaysian Finance Bill 2020 incorporates transfer pricing-related changes to the current Income Tax Act, 1967 (“ITA”). The changes permit significantly greater authority to the Malaysia Inland Revenue Board (“MIRB”) and re-emphasises the importance of transfer pricing compliance, with effect from 1 January 2021.
Thec Covid-19 pandemic has triggered the most severe recession and is causing enormous damage to the world economy. The economic downturn will impact a group’s transfer prices, analysis and documentation, more so with the BEPS Action Plans in place and the high level of transfer pricing scrutiny across the globe.