What Is Country By Country Reporting?

CbC Reporting requires large Multinational Groups of Entities (MNEs) to file a CbC Report that should provide a breakdown of the Multinational Group’s global revenue, profit before tax, income tax accrued and some other indicators of economic activities for each jurisdiction in which the MNE operates. The purpose of CbC Reporting is to eliminate any gap in information between the taxpayers and tax administrations with regards to information on where the economic value is generated within the MNE Group and whether it matches where profits are allocated and taxes are paid on a global level.

The Regulations ensure that UAE entities that undertake certain activities are not used to artificially attract profits that are not commensurate with the economic activity undertaken in the UAE. The Regulations are effective from 1 January 2019, and apply to financial years starting on or after 1 January 2019.

What Is Due Date Of Filing CbC Reports?

The CbC report should be filed within 12 months from the end of the reporting year of the MNE Group. E.g. With respect to the financial year commencing on January 1st 2019 and ending by December 31st 2019, the CbC Report should be filed no later than December 31, 2020.

To Whom CbC Report Is To Be Filed?

CbC reports are primarily to be filed where parent company is headquartered but if the HQ country has not implemented CbCR, multinational company should appoint a surrogate parent entity who will take care of the filing.

What Is A CbC Report?

A report including quantitative and qualitative information about the MNE Group. Information such as revenues, profits, employees count, business description, etc. should be reported under three tables:

• Table I – This contains the quantitative information per tax jurisdiction such as third party and related party revenues, stated capital, taxes accrued and paid, employee count, etc.
• Table II – This contains the qualitative information per constituent entity on the main business activities undertaken during the year.
• Table III – This contains any additional information necessary to facilitate the understanding of Tables I and II (e.g. assumptions on exchange rates, source of data, etc.)