martes, 6 de diciembre de 2016

US tax-exempt organizations may have global country-by-country reporting requirements

The IRS on June 29 issued final regulations (TD 9773) requiring annual country-by-country (CbC) reporting for US-parented multinational enterprise (MNE) groups.  Similar regulations have been adopted or proposed in other countries, and more tax jurisdictions are expected to do so in the upcoming months. The CbC reporting rules in the United States and worldwide generally are aligned with the recommendations in the OECD’s 2015 Final Report for Action 13 (Transfer Pricing Documentation and Country-by-Country Reporting), issued in October 2015.

The stated purpose of CbC reporting is to help the IRS and foreign tax authorities perform high-level transfer pricing risk identification and assessment. While it may seem unusual that tax-exempt entities would represent significant transfer pricing risk given their tax-exempt status, there are no explicit exclusions for any specific industry sectors or groups in the final US CbC reporting rules. Therefore, US-parented tax-exempt organizations that are considered MNEs potentially are subject to CbC reporting in the United States.

The final US CbC reporting regulations include an exemption from revenues that may put some tax-exempt organizations below the $850 million annual revenue threshold for filing a CbC report with the IRS.  However, other countries may not provide a similar exemption and therefore may require direct local filing of CbC reports under a so-called ‘secondary mechanism’ for filing.

Thus, while as a result of the US exemption, some US-parented tax-exempt entities may not be required and may not be able to file a CbC report with the IRS, they still may have foreign filing obligations, without the confidentiality protections from filing with the IRS. In addition, the $850 million revenue filing threshold in the United States (including the exemptions available for tax-exempt organizations) should be closely reviewed, as indirect investments and how investment operations are held could impact how the threshold is calculated.

Source & more info: PwC

No hay comentarios:

Publicar un comentario