The UK’s HM Revenue and Customs today announced that it will propose amendments to existing country-by-country reporting regulations applicable to large multinational enterprises to add partnerships as reporting entities.
The proposed regulation amendments, to be issued this fall, will be consistent with OECD guidance issued in June and will be applicable January 1, HMRC said.
The country-by-country reporting rules are designed to provide HMRC with information about the transfer pricing practices of large multinational enterprises that operate in the UK. Final regulations on the topic were issued last February which follow an October 2015 OECD and G20 agreement under action 13 of the base erosion profit shifting (BEPS) plan.
The OECD followed up that guidance with the June guidance, which specifies that an MNE group should use the accounting consolidation rules to determine if a partnership is a constituent entity of a multinational enterprise subject to country-by-country reporting.
The June OECD guidance also specifies how to account for a partnership which is tax transparent and thus has no tax residency anywhere, and how to account for a reverse hybrid partnership, which is tax transparent in its jurisdiction of organization but considered by a partner’s jurisdiction to be tax resident in its jurisdiction of organization.
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