On 8 June 2015 the OECD released a package of measures for the implementation of the Country by Country reporting obligation contained in Action Point 13 (“Transfer pricing documentation and country by country reporting”)
Such obligation derives from the BEPS Action Plan (2013) adopted by the OECD. In it, the OECD announced that the new transfer pricing rules would include new documentation obligations for multinational companies, which will be required to provide governments with information on their global allocation of the income, economic activity and taxes paid among countries according to a common template. Such announcement was followed by the publication of the “Guidance on transfer pricing documentation and Country by Country reporting” (September 2014) and the “Guidance on the implementation of transfer pricing documentation and Country-by-Country reporting” (February 2015).
The new implementation package contains model legislation with several provisions (8) related to the Country by Country report.
Under these provisions, the ultimate parent entity of a multinational group is required to file the Country by Country report in its jurisdiction of residence. If the jurisdiction of the parent company does not impose this obligation, then any other entity may be required to do so in its home jurisdiction.
For purposes of the model legislation, the Country by Country report must contain information regarding global allocation of income and taxes paid in each jurisdiction in which the multinational group operates and information related to entities different from the parent entity (business activities, jurisdiction in which they operate).
The model legislation also contains certain definitions and provisions related to the use and confidentiality of the Country by Country report information.
The package also contains three Model Competent Authority Agreements in order to facilitate the exchange of Country by Country reports among tax administrations.
Some jurisdictions, like Spain, have included a Country by Country report obligation in the draft bill of New Corporate Income Tax Regulations. In accordance with the draft provisions, aligned with the OECD work, the Country by Country report obligations will need to be filed for fiscal years beginning on or after 1 January 2016. The report shall be filed no later than 12 months after the last day of the reporting fiscal year of the multinational group (i.e. those companies whose fiscal year ends in December 2016 shall file the report no later than December 2017).