OECD’s guidance on the implementation of CbC reporting

The OECD/G20 BEPS Project set out 15 key actions to reform the international tax framework and ensure that profits are reported where economic activities are carried out and value is created. One of the main outcomes of that work has been the adoption of country-by-country (CbC) reporting, as set out in the 2015 BEPS Report on Action 13 “Transfer Pricing Documentation and Country-by- Country Reporting”.

Under CbC reporting, MNEs will be required to provide aggregate information annually, in each jurisdiction where they do business, relating to the global allocation of income and taxes paid, together with other indicators of the location of economic activity within the MNE group. It will also cover information about which entities do business in a particular jurisdiction and the business activities each entity engages in.

Following the endorsement of the BEPS Package by G20 Leaders in November, the focus has now shifted to ensuring a consistent implementation, including of the new transfer pricing reporting standards developed under Action 13 of the BEPS Action Plan. To that aim, the guidance released in June sets out:
– Transitional filing options for MNEs that voluntarily file in the Parent jurisdiction;
– Guidance on the application of CbC reporting to investment funds;
– Guidance on the application of CbC reporting to partnerships; and
– The impact of exchange rate fluctuations on the agreed EUR 750 million filing threshold for MNE groups.

The OECD will continue to support the consistent and swift implementation of CbC reporting to ensure a level playing field, but also provide certainty for taxpayers and improve the ability of tax administrations to use CbC reports in their risk assessment work.

For further information about the OECD’s work on CbC reporting, follow this LINK.

Memorandum on the approval of Romania’s accession as an associate to the BEPS implementation Forum, initiated by OECD

In May 2016, the Ministry of Finance issued a memorandum on the approval of Romania’s accession as an associate to the BEPS implementation Forum, initiated by OECD.

In this respect, as BEPS associates, all countries and jurisdictions will collaborate with OECD and G20 to develop standards and to monitor the implementation of the entire BEPS package and to evaluation of the four minimum BEPS standards related to unfair tax practices, abuse of tax agreements and country-by-country reporting requirements.

At the same time, as BEPS associates, countries and jurisdictions commit to introduce BEPS package and to apply it. Moreover, a country’s participation to the achievement of BEPS framework will allow that country to implement the BEPS project and will give the certainty that BEPS solutions are applicable to all the countries and jurisdictions involved.

Deloitte’s CbC Digital Exchange (CDX)

Deloitte’s CDX (CbC Digital Exchange) tool was developed to help users visualize the data that may need to be reported for their organization under the OECD model. The tool provides standard visualizations and ratio analyses, including effective tax rate, percent of related revenues to total revenue, number of employees versus unrelated party revenues, profit before tax, stated capital or tangible assets, etc.

CDX can help businesses gauge organizational readiness to collect and aggregate the data needed under new CbC Reporting requirements. Users can preview, through a variety of lenses, how their data might look to stakeholders, including tax authorities and the public, and identify challenges in data collection. This exercise helps businesses to assess priorities and consider proactive steps needed before the CbC Reporting requirements come into effect.

CDX’s simple, intuitive user interface offers a flexible upload process, an aggregated view of the data in the OECD format, simulation functionality with the ability to run top-down and bottom-up scenarios and the ability to sort and filter results.

CDX is intended for use by global organizations with annual consolidated group revenues above EUR 750 million. If your organization is audited by Deloitte or is part of a group or affiliated with an entity that is audited by Deloitte, there may be regulatory restrictions relating to the provision of services to your company and we may not be able to provide you access to the tool in its current form.

Please contact us using the details below for assistance in obtaining access to CDX.

Ciprian Gavriliu
Tax Director DELOITTE ROMÂNIA

Bogdan Barbu
Tax Senior Manager DELOITTE ROMÂNIA

Alexandra Bunea-Oprișescu
Tax Manager DELOITTE ROMÂNIA

Bogdan Constantinescu
Tax Manager DELOITTE ROMÂNIA

Narcisa Ichim
Tax Manager DELOITTE ROMÂNIA