UK Issues Guidance On Preparing CbC Reports
The UK tax authority, HM Revenue and Customs (HMRC), has issued guidance for businesses on the preparation of country-by-country reports in the required format.
The CbC report is one element of a new three-tiered standardized approach to transfer pricing documentation proposed under Action 13 of the OECD’s base erosion and profit shifting project. The Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) Regulations, 2016, which implement a new CbC reporting obligation for multinational enterprises in the UK, entered into force on March 18, 2016.
The CbC report is required if the MNE group has a total consolidated group revenue of EUR750m (USD877.8m) or more for an accounting period. The obligation to file a report will apply to accounting periods commencing on or after January 1, 2016. A report must be filed no later than 12 months after the end of the accounting period to which it relates.
The guidance, issued on August 15, sets out the format that must be used for UK reports. It also explains how to make corrections to data and the error codes associated with certain data elements of the XML schema.
Taxpayers need to generate a valid XML file that conforms to the OECD schema and send it to the HMRC using the reporting service, which will be available soon. However, taxpayers can start to prepare their XML file now, HMRC said.
