1. Current Status of Country by Country Reporting
Tax and Technology Conference:
Vienna 9-10 February, 2016
Jeffrey Owens, Director of the WU Global Tax Policy Center
Vienna, February 9 – 10, 2016

2. BEPS action plan: A Recap
Endorsed by G20 Heads of State in November 2015

3. Tax transparency: an overview
Exchange of Information (Eol)
DTTs/TIEAs
Anti-Money Laundering (AML) standards
FATCA/OECD Common Reporting Standard (CRS)
Tax transparency
EU tax transparency package (Rulings/APAs)
OECD BEPS actions 12 & 13
FATCA and Intergovernmental Agreement (IGAs)
Sector initiatives:
Extractive Industries Transparency Initiative (EITI)
Dodd-Frank Act
Support from political bodies (G20/G8)
Enablement from
international
organisations

4. The transparency timeline
2009
March – May 2010
March-June 2013
March-June 2014
Feb – Mar 2015
30 January 2014
OECD Discussion Draft on BEPS Action 13
 13 February 2014
OECD releases Common Reporting Standards
 11 June 2014
Announcement by EC on state aid investigations
9 February 2015
Implementation guidelines for CbCR issued by OECD
 18 March 2015
EC proposes for Transparency Package  
19 March 2015
EC’s negotiations with
Switzerland on landmark tax transparency agreement
September 2009
OECD proclaims a
“revolution” in
transparency and
exchange of tax
Information
18 March 2010
FATCA signed into law
 May 2010
Amendment of OECD
Multilateral Convention
(Mutual Administrative
Assistance in Tax
Matters)  
29 May 2013
Australia introduces a tax bill on public report by ATO for companies with annual income of $100 million or more
13 June 2013
UK launched “Fair Tax Mark”
2003-4
2009
2010
2013
2014
2003
Jul – Sep 2010
June – Dec 2013
Aug – Dec 2014
Sep 2015 – 2017
June 2003
Extractive Industries
Transparency
Initiative (EITI)
launched
21 July 2010
Dodd-Frank Wall Street
Reform and Consumer
Protection Act signed
into federal law
 24 September 2010
US IRS releases final
schedule/instructions
for Schedule UTP
June 2013
EC asks information about tax
ruling practice
 June 2013
Information request about IP-regimes from the ten EC Member States
 31 December 2013
Deadline for EU Member States to transpose country by country reporting obligation for banks under CRD IV into domestic law
13 August 2014
Standard for Automatic Exchange of Information in Tax Matters (OECD)
 16 September 2014
Report on BEPS Action 5 (OECD)
 17 December 2014
EC extends information enquiry on tax ruling practice to all Member States
September 2015: OECD BEPS Action 12 finalized
November 2015: Heads of G20 endorse
January 2016: MCAA signed in Paris
1 January 2016: Exchange of cross-border tax rulings/ APAs to commence under revised EU Directive on Administrative Cooperation
 2016: Early adopting countries begin automatic exchange of tax information using the OECD CRS
 2017: First exchange of information under CbCR, using FY2016 data
2004
2004
UK introduces
Disclosure of Tax
Avoidance
Schemes
(DOTAS)

5. Country by Country (CbC) Reporting
TP Master file
TP Local file
CbC report
CbC reporting: getting a good look inside
What it is: Companies will have to provide tax authorities with country-specific allocation of profits, revenues, employees and assets; worldwide adoption expected by 2017, though specific adoption deadlines will vary by country.
What it is not:
Not intended as a substitute for a full transfer pricing analysis, nor is it intended for use in formulary apportionment-based adjustments. But it will feed into tax audits.
CbC Reporting
Why this early focus is needed:
Because of the level of complexities involved with cross-border transactions, and data collection and management, many companies are already preparing now, testing and validating processes and technologies. 28

6. Master file – information required
Organizational structure
Business description
Intangibles
Intercompany financial activities
Financial and tax positions
Structure chart:
Legal ownership
Geographic location
Important drivers of business profit
Overall strategy description
Financing arrangements for (related and unrelated) lenders
Annual consolidated financial statements
Supply chain of:
Five largest products/ services by turnover
Products/services generating more than 5% of sales
List of important intangibles and legal owners
Identification of financing entities
List and description of existing unilateral APAs and other tax rulings
Main geographic markets of above products
List of important intangible agreements
Details of financial transfer pricing policies
List and brief description of important service arrangements
R&D and intangible transfer pricing policies
Functional analysis of principal contributions to value creation by individual entities
Details of important transfers
Business restructuring/ acquisitions/divestitures during fiscal year
Master file
CbC report
Local file 29

7. CbC reporting Implementation status
Non compliance is a criminal offense in the Netherlands
Already implemented
Implementation in progress
Ireland
United States
France
Italy
Japan
Mandatory for large UK parented groups only
China: Filing due with tax return on 31 May
Spain’s group definition based on control
Does not include surrogate parent concept
Equity rather than stated capital and accumulated earnings
OECD BEPS project outcomes: New reporting under Action 13

8. Action 13:CbC reporting P Consistent with OECD recommendations OECD
OECD
Australia
China
Denmark
Finland
France
Status
Adopted legislation on 3 December 2015, to take effect as of 1 January 2016.
Draft legislation published
Bill approved by parliament on 18 December 2015, to take effect as of 1 January 2016.
Draft bill published on 21 December 2015.
Who
Ultimate Parents of group with revenue of EUR 750 million or greater
Threshold of AUD 1 billion (approximately EUR 670 million)
Threshold of RMB 5 billion (approximately EUR 705 million) 
Threshold of DKK 5.6 billion (approximately EUR 750 million) P
When
For fiscal years starting in 2016, with filing within 12 months from fiscal year end
To be filed together with the annual tax return (due 31 May). Possible to apply for an extension.
The government intends for the provisions to be enacted and effective beginning of 2017.
Secondary filing rule
1.Local filing or 2.Filing by named “Surrogate Parent” entity
Local filing Filing by "next tier parent entity"
Local filing
Penalties
Left to countries
General penalty for non compliance
General penalty regime.
Penalties in the maximum amount of EUR 25,000.
Specific penalty regime. Should not exceed EUR 100,000
Consistent with OECD recommendations

9. Action 13:CbC reporting P Consistent with OECD recommendations OECD
OECD
Ireland
Italy
Japan
Mexico
Netherlands
Status
Adopted legislation applicable as of 1 January 2016
Published legislation in the Official Gazette on 30 December 2015, to apply as of 1 January 2016.
Draft legislation published on 16 December 2015.
Published legislation on 18 November 2015, to apply as of 1 January 2016.
Who
Ultimate Parents of group with revenue of EUR 750 million or greater P
Revenues in excess of JPY100 billion (approximately US$820 million)
Revenues in excess of 12 billion pesos (approximately EUR 650 million)
When
For fiscal years starting in 2016, with filing within 12 months from fiscal year end
Proposed to apply to taxable years beginning on or after 1 April 2016
Secondary filing rule
1.Local filing or 2.Filing by named “Surrogate Parent” entity
Local filing
Penalties
Left to countries
Penalty applicable for not complying with tax return obligation.
Specific penalty between €10,000 and €50,000 may apply.
General penalties and presumptive taxation may apply in case of non-compliance.
In addition to penalties, non compliant taxpayers may be disqualified from entering into contracts with the Mexican public sector.
Criminal penalty for non compliance
Consistent with OECD recommendations

10. Action 13:CbC reporting P OECD Norway Poland Spain United Kingdom
OECD
Norway
Poland
Spain
United Kingdom
United States
Status
Published draft legislation for consultation on 2 December 2015.
Adopted regulations applicable as of 1 January 2016.
Adopted implementing regulations applicable as of 1 January 2016.
Enabling legislation adopted. Draft regulations published.
Proposed regulations published on 21 December 2015.
Who
Ultimate Parents of group with revenue of EUR 750 million or greater
Revenues in excess of NOK 6.5 billion (approximately USD 730 million) P
Threshold of £586 million (approximately EUR 790 million)
Revenue of $850 million or greater
When
For fiscal years starting in 2016, with filing within 12 months from fiscal year end
First reporting should be done in 2018 based on figures from 2016.
For taxable years beginning on or after the date final regulations are published
Secondary filing rule
1.Local filing or 2.Filing by named “Surrogate Parent” entity
None
Local filing
Voluntary local filing
Penalties
Left to countries
General penatly for non compliance.
General penalty for non compliance with reporting obligations
Specific penalty for non compliance
General reporting-related penalties may apply

11. Who is the reporting entity?
Group: Collection of two or more enterprises related through ownership or control such that it is required to prepare consolidated financial statements (or would be so required if publicly traded)
Ultimate Parent
Any local entity
Surrogate Parent
Top entity
No other entity owns a controlling interest
If country of Ultimate Parent does not require CbC reporting for the Group, or
Local country is not receiving CbC report from Ultimate Parent jurisdiction
Unless the Group appoints Surrogate Parent, and
Local country rules allow for Surrogate Parent
If country of Surrogate Parent requires CbC reporting and local country has arrangement in place to receive such information from country of Surrogate Parent, and
Country of Surrogate Parent and local country both have been informed
Files CbC report with tax authority where it is resident
Tax authority will share with other countries under information exchange relationships
Files CbC report with tax authority where it is resident
Tax authority will share with other countries under information exchange relationships
Files CbC report with tax authority in each such local country under country’s rules
PRIMARY REPORTING
SECONDARY REPORTING
OECD BEPS project outcomes: New reporting under Action 13

12. Governments and business will have to learn to live in a transparent environment
Exchange of Information (EOI) on request and rapidly moving to automatic
C by C and the Master File
Disclosure provisions on tax planning schemes
Joined up tax administrations
Are tax administrations able to use all this information and prepared to be transparent themselves? 30