Countries make headway on country-by-country reporting 

An OECD report released May 24 found that 60 out of 95  countries reviewed have adopted final legislation to require multinationals to file country-by-country reports consistent with international agreements.

The “Inclusive Framework,” a voluntary association of over 100 countries, is conducting peer reviews to assess compliance with country-by-country reporting, agreed to by countries in 2015 as a result of the OECD/G20 base erosion profit shifting (BEPS) project.

The country-by-country reporting scheme is designed to provide tax administrations with a tool to assess whether there is a risk that multinationals operating in their countries are engaging in tax avoidance through transfer pricing or other means.

This first phase of the peer review assesses countries’ progress adopting laws and regulations implementing the new country-by-country reporting scheme; later assessments will consider how well states comply with the requirement to exchange of the country-by-country tax reports with other countries’ tax administrations; and, after that, the Inclusive Framework will review whether countries are complying with rules requiring that the tax reports not be shared publically.

“The peer reviews show that practically all countries that serve as headquarters to the large MNEs covered by the initiative have introduced new reporting obligations compliant with transparency requirements,” the OECD said in a release.

According to the report, 60 countries that have thus far adopted legislation to put country-by-country reporting into place consistent with the BEPS requirements. Another group has begun but not completed the legislative process.

The peer review made recommendations to 28 countries on how to improve aspects of their framework.

Only 39 jurisdictions have provided detailed information in their laws on the appropriate use of the country-by-country reports, the report showed.

Pascal Saint-Amans, director of the OECD Centre for Tax Policy and Administration, said the peer reviews and the imminent launch of global exchange of country-by-country reports by tax administrations show that the BEPS measures are being implemented rapidly, consistently, and globally.

The first country-by-country reports are due to be exchanged by countries in June.