UK country-by-country reporting guidance published

The UK’s HM Revenue & Customs (HMRC) today published a policy paper titled “Amendments to Country By Country reporting 2017” and an updated policy paper titled “Country by country reporting.

The amendments are a new measure that update 2016 country-by-country reporting regulations requiring multinational enterprises to provide HMRC with information about their global activities, profits, and taxes.

The country-by-country rules implement a 2015 scheme agreed to among OECD and G20 nations in the base erosion profit shifting (BEPS) plan. The plan is designed to help countries identify multinational corporations that may be engaging in tax avoidance.

The UK amendments extend the original UK statutory country-by-country requirements to partnerships.

They also require a UK entity that has an obligation to file a UK country-by-country report to ask its parent entity for the information necessary to complete a full report. If the parent entity refuses, the UK entity must tell HMRC of the refusal and file a country-by-country report, the paper states.

The new rules require local filing only if the parent jurisdiction of the foreign MNE entered an international agreement which allows for exchange of information but has not entered into specific arrangements to exchange country-by-country reports.

Further, the amendments introduce a requirement for a UK entity in each MNE group to tell HMRC annually which entity in the MNE group will file the country-by-country report and where. The entity must also provide the names and unique taxpayer references for all of the MNE group’s UK entities.

The updated policy paper “Country by country reporting” was first published on February 2016. The updates were needed to reflect new OECD and EU guidance, HMRC said.

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