OECD addresses dividends received, employee count in updated country-by-country reporting guidance

by Julie Martin, Editor MNE Tax

OECD today updated its guidance on country-by-country reporting for multinationals, providing clarifications to assist taxpayers and tax administration,

The new guidance, approved by the “Inclusive Framework on BEPS,” a coalition of over 100 countries, aims to answer questions that have risen as the country-by-country reporting scheme has moved to the implementation phase.

The OECD said in a release that the new country-by-country reporting guidance clarifies the treatment of dividends received and the number of employees to be reported in cases where an MNE uses proportional consolidation in preparing its consolidated financial statements, which apply prospectively.

The updated guidance also clarifies that shortened amounts should not be used in completing Table 1 of a country-by-country report and contains a table that summarizes existing interpretative guidance on the approach to be applied in cases of mergers, demergers, and acquisitions, the OECD said.

Country-by-country reporting is a scheme of reporting and exchanging information about multinational taxpayers that was agreed to by nations in 2015 as a result of the base erosion profit shifting (BEPS) plan. The scheme is designed to provide tax administrations worldwide with a tool to determine if MNEs are avoiding tax through inappropriate transfer pricing or other means.

The updated guidance is available in English, French, German and Spanish.

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Julie Martin

Founder & Editor at MNE Tax

Julie Martin is the founder of MNE Tax. She edits the publication and regularly contributes articles on new developments in cross-border business taxation.

Julie has worked as a tax journalist and editor for more than 13 years. Prior to that, she worked as an in-house tax attorney in New York. She also holds an LLM in taxation from New York University School of Law.

Julie can be reached at [email protected].

@mnetax

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Julie can be reached at [email protected].