country-by-country reporting Archives - Page 2 of 3

The Evolving World of Global Tax Planning

by McDermott Will & Emery | Jan 18, 2017 | Transfer Pricing Resource, Uncategorized

In October 2015, final recommendations on Base Erosion and Profits Shifting (BEPS) were released, setting in motion epochal changes that will impact the global effective tax rate (ETR) of multinational enterprises (MNE) in the coming years.

Country-by-Country Reporting (CbCR) is the first, almost globally adopted output of the BEPS process currently facing MNEs. It raises some potentially far-reaching questions with respect to traditional operating models and supply chain structures, and also affects the future of cross-border dispute resolution. Harnessing the potential upsides and downsides of these and the other evolutions will be a driver of the future ETR of MNEs.

View the five-minute video below, in which McDermott lawyers discuss the implications of Country-by-Country Reporting for MNEs.

World Taxing Authorities Prepare to Attack

by McDermott Will & Emery and Kevin Spencer | Aug 17, 2016 | IRS Audits, IRS Guidance, Transfer Pricing Resource, Uncategorized

Global tax policy has evolved dramatically, with multinational corporations coming under attack from all directions. To respond to budget deficits and economic austerity, worldwide taxing authorities are deploying a new weapon: information exchange. As multinational corporations struggle to remain compliant and competitive in a world where effective tax rate management can be a critical element of cost control, what does this evolution mean for your business?

To find out, read the full article here.

CbC Reporting Is Here to Stay! Treasury Issues Final Regs

by Kevin Spencer | Jun 30, 2016 | IRS Guidance, Transfer Pricing Resource, Uncategorized

As anticipated in our earlier post, Country-by-Country (CbC) reporting is finally here! On Wednesday, the US Department of the Treasury released final regulations for CbC reporting, effective June 30, 2016. The final regulations apply to any US person who is the “ultimate parent” of a multinational enterprise group that has annual revenue for the preceding year of at least $850 million. For tax years beginning after June 30, 2016, taxpayers subject to the final regulations will be required to file a new Form 8975 Country-by-Country Report with their US federal income tax returns. CbC reporting will likely change the disclosure landscape for entities operating in multiple countries.

Preparing for Country-by-Country Reporting in 2016

by Kevin Spencer | Mar 30, 2016 | IRS Guidance, Transfer Pricing Resource, Uncategorized

Country-by Country (CbC) reporting is on the horizon for large US multi-national enterprises (MNE). As part of the broader Base Erosion Profit Shifting (BEPS) project undertaken by the Group of 20 (G20) and the Organisation for Economic Co-operation and Development (OECD), the United States will soon require the parent entity of large US MNE groups to file with the Internal Revenue Service (IRS) a new annual report that requires information regarding income earned and taxes paid by the group on a country-by-country basis. The new reporting requirements would generally apply to US MNE groups with annual revenues of $850 million or more.

Late last December, Treasury published proposed regulations detailing the future reporting process. Recently, Robert Stack, Treasury deputy assistant secretary (international tax affairs) indicated that Treasury anticipates issuing final regulations by June 30, 2016, which would be effective for US MNEs with tax years beginning after that date. (Stack’s comments are available at Tax Notes, here and here.) Because the US reporting requirements will go into effect in the middle of 2016, some US MNE groups have expressed concern that other tax jurisdictions may require subsidiaries to file CbC reports.

Both Treasury and the IRS believe that CbC reporting will assist in better enforcement of the US tax laws, though there is some concern that information collected may be too readily shared with other tax jurisdictions that may not safeguard such information as carefully as the United States. Indeed, the Preamble to the new CbC reporting regulations states that CbC reports filed with the IRS may be exchanged with other reciprocating tax jurisdictions in which the US MNE group has operations, and Treasury expects that the competent authority will enter into competent authority agreements for the automatic exchange of CbC reports under the authority of information agreements to which the US is a party. The Preamble also provides that information exchanged may not be disclosed or used for non-tax purposes.

Mr. Stack recently affirmed the priority of the confidentiality of information gathered through CbC reporting, stating that the United States would have the right to stop sharing information if the other tax jurisdiction were to disclose it. The issue of confidentiality of CbC reporting was recently highlighted by efforts in the European Union to provide for the public disclosure of CbC reporting.