Understanding Country by Country Reporting (CbCR): A Comprehensive Guide for Multinational Companies

What is a CbCR Report?

A Country-by-Country Report (CbCR) is a detailed document that multinational enterprises (MNEs) are required to prepare. This report provides information about the allocation of profits, taxes paid, and business activities in each country or jurisdiction where the MNE operates. The primary purpose of the CbCR is to enhance tax transparency and prevent base erosion and profit shifting (BEPS).

Why is CbCR Important?

• Preventing Tax Avoidance: CbCR helps tax authorities in different countries track the flow of profits of multinational enterprises and prevent tax avoidance practices that harm countries.

• Increasing Transparency: This report provides a clearer picture of the business activities of multinational enterprises in various countries, facilitating oversight by tax authorities.

• Promoting Tax Fairness: With the introduction of CbCR, it is expected to create fairness in tax collection, ensuring that the tax burden is not solely borne by small and medium-sized enterprises.

Who is Required to Prepare a CbCR Report?

MNE groups with a consolidated group revenue of more than a specified threshold are generally required to prepare a CbCR. This threshold varies from country to country, but it is typically based on the equivalent of €750 million.

What Information is Included in a CbCR Report?

A CbCR typically includes information on:

• Allocation of profits: The amount of profit generated in each country.

• Taxes paid: The amount of taxes paid in each country.

• Business activities: The types of business activities conducted in each country.

• Number of employees: The number of employees working in each country.

• Tangible assets: The value of tangible assets owned in each country.

How to Prepare a CbCR Report?

Preparing a CbCR report requires adherence to international standards set by the OECD. MNEs must use the prescribed format and submit it to the tax authorities of the country where the ultimate parent entity is located.

Why Choose Dana Consultants for Your CbCR Needs?

Dana Consultants can assist your company in:

• Understanding Regulations: Our experts will help you understand the regulations and requirements related to CbCR reporting.

• Data Gathering: We will assist you in collecting the necessary data for preparing the CbCR report.

• Report Preparation: We will prepare the CbCR report in accordance with international standards and applicable regulations.

• Report Submission: We will assist you in submitting the CbCR report to the tax authorities.

When is the CbCR Filing Deadline?

The deadline for filing CbCR reports varies by country. It is crucial to check the specific regulations in your jurisdiction for the exact deadline.

For most countries, the deadline is generally within 12 months after the end of the fiscal year.

Want to know more about CbCR reporting?

Contact us at:

• Email: askcfo@dana-consultants.com

• Phone: +62 811 2742314

We are ready to assist you!

Disclaimer: The information provided in this article is general in nature and can be change following the regulations updated