OECD releases 79 public comments responding to review of country-by-country reporting scheme

By Julie Martin, MNE Tax

The OECD today released 79 comment letters it received in response to its consultation on a 2020 review of the country-by-country reporting rules for multinational groups.

The OECD also announced that it has canceled a planned public hearing on the country-by-country reporting update consultation in response to the Covid-19 emergency.

Established in 2015 as a result of the OECD/G20 base erosion profit shifting (BEPS) plan agreements, the country-by-country reporting scheme provides tax administrations with information needed to assess whether there is a risk that multinational groups are avoiding tax through inappropriate transfer pricing or other means. As a part of the 2015 BEPS agreements, countries decided that the country-by-country reporting scheme would be reassessed in 2020.

As expected, NGOs and labor groups urged in their comment letters that countries to change the country-by-country reporting rules to make the data available to the public while business representatives argued that the data should remain for the exclusive use of tax administrations.

A group of 33 US lawmakers joined a letter in support of public country-by-country reporting, arguing that the disclosure of multinational group information would better inform policy changes regarding international corporate taxation and would reduce investors’ financial risk.

The US lawmakers also said in their letter that the country-by-country reporting standards should be aligned with the Global Reporting Initiative (GRI) model and that serious consideration should be given to reducing the EUR 750 million (USD 850 million) revenue reporting threshold so that more multinational groups would be required to file.

Business at the OECD (BIAC) commented that it is too soon to make any changes because the full implications of the country-by-country reporting scheme are not yet known.

Moreover, BIAC said that any changes to the country-by-country report format should be made only after the conclusion of pillar one and pillar two discussions concerning the digitalization of the economy.

The Japan Foreign Trade Council said that changes to the reporting template and information items should be limited to the minimum amount needed because any changes will increase businesses’ compliance costs.

Action Aid argued that improvements need to be made to the system of exchanging the reports. The group said that tax administrations of low-income counties are not getting country-by-country data because arrangments for the exchange of information are too complex.

Written comments were submitted by AFEP, Accountancy Europe; Action Aid; Alimentation Couche-Tarde Inc.; American Sustainable Business Council; Anglo American PLC; Association for Financial Markets in Europe; Astra Zeneca, Australasian Centre for Corporate Responsibility; Austrian Federal Economic Chamber; BDO; BEPS Monitoring Group; Business at OECD; CBI; Canadian Labour Congress; Centre for International Corporate Tax Accountability and Research; China National Petroleum Corporation; Church Action for Tax Justice; Cuatrecasas, Deloitte South Africa; Deloitte UK; EBIT; EFAMA; EY; Eurodad; FACT Coalition; Federation of German Industries; Ferrovial; Flicke Gocke Schaumburg; Foundation for Family Businesses; French Banking Federation; GRI; GRI Standards; Galindez, Medrano & Asociados; German Insurance Association; HESTA: ICRIT; IFSP; Indonesian Institute of International Tax Studies; InterContinential Hotels; Investors (847); Japan Foreign Trade Council; Jer¢nimo Martins, SGPS; Johann Muller APS; KPMG; Keidanren; Loyens & Loeff; Mazars; MEDEF; Malta Institute of Accountants; Michiko Nakamura; Moss Adams LLP; National Foreign Trade Council; Norges Bank; Oxfam; Principles for Responsible Investment; Public Services International; PwC; South African Institute of Chartered Accountants; Stena AB Group; Swiss Business Federation; Swiss Holdings; TEI; TUAC; Tax Justice Network; Tax Research; Technology Industries of Finland; TECK Resources; The Association of British Insurers; The Capital Markets Tax Committee of Asia; The International Chamber of Commerce; The Investment Association; The Orsted Group; The Professional Institute of Public Service in Canada; US Chamber of Commerce; UNISON: USCIB; and Union of Finance Personnel in Europe.

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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].