As a one of the top accounting firms in Dubai, AHG provides Country by Country Reporting services. 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.
On 30 April 2019, the Cabinet Resolution No. 32 of 2019 was issued introducing the requirements on Country-by-Country Reporting (CbCR) in the UAE. CbC Reporting is part of Action 13 of the Base Erosion and Profit Shifting (BEPS) initiative led by the Organization for Economic Co-operation and Development (OECD) and G20 industrialized nations.
BEPS Action 13 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
CbCR is a reporting requirement that was introduced as part of the OECD’s BEPS (Base Erosion and Profit Shifting) initiative. It requires MNEs (Multinational Enterprises) with annual group revenue of €750 million or more to file a Country-by-Country Report with their local tax authorities, detailing their global allocation of income, taxes paid, and certain indicators of economic activity.
The primary benefit of CbCR is that it provides tax authorities with greater transparency into the global operations of MNEs. This information can be used to better assess risk and ensure that MNEs are paying their fair share of taxes.
One challenge associated with CbCR is its complexity. The reporting requirements can be difficult to understand and interpret, particularly for MNEs with operations in multiple countries. Additionally, complying with CbCR may require significant investment in time and resources.
There are a number of steps your company can take to prepare for CbCR, including: reviewing your organizational structure to ensure compliance; assessing your data collection and management processes; and investing in technology solutions to automate reporting.