countrybycountryrapportering

Countrybycountryrapportering, often abbreviated as CbCR, is a tax regulation that requires multinational enterprises (MNEs) to report their financial information and tax activities on a country-by-country basis. The primary goal of CbCR is to enhance tax transparency and provide tax authorities with a clearer understanding of how MNEs operate globally and where they are generating profits and paying taxes.

CbCR was developed by the Organisation for Economic Co-operation and Development (OECD) as part of its Base Erosion and Profit Shifting (BEPS) project. The initiative aims to combat tax avoidance strategies employed by MNEs that artificially shift profits to low or no-tax jurisdictions. By collecting detailed information on revenue, profit before income tax, income tax paid and accrued, stated capital, accumulated earnings, number of employees, and tangible assets for each jurisdiction in which the MNE operates, tax authorities can better identify potential risks and areas of concern.

The reporting obligation typically applies to MNEs meeting a certain consolidated group revenue threshold, which is generally set at €750 million. The first reporting year was generally 2016, with reports typically due within 12 months after the end of the fiscal year of the MNE group. The information gathered through CbCR is intended to be used by tax administrations for risk assessment and to ensure that MNEs are complying with tax laws in the jurisdictions where economic activity takes place. While the data is primarily for tax authority use, there are ongoing discussions and some jurisdictions are moving towards making parts of this information publicly available to increase overall corporate accountability.