Friday, 5 May 2017

UK amends country-by-country reporting rules

The UK’s Statutory Instrument 2017 (No. 497), published on 30 March, amends SI 2016 No. 237, which gives effect in the UK to the G20/OECD’s minimum standard for country-by-country (CbC) information to be provided to tax authorities. These amendments follow additional guidance on the Implementation of Country-by-Country Reporting released by the G20/OECD in June 2016 and updated in December 2016. In addition, the regulations ensure compliance with the amended EU Council Directive on Administrative Cooperation 2011/15/EU (DAC4).
The amendments enter into force on 20 April 2017, and affect all multinational enterprise (MNE) groups that meet the CbC threshold requirement and include at least one UK tax resident entity and/or an entity resident elsewhere with a permanent establishment in the UK. The key changes are as follows:

  • The application of the rules has been amended to include MNE groups whose ultimate parent entities are partnerships governed under UK law, including LLPs. The regulations will require the reporting partner of such partnerships to ensure compliance;
  • There are new annual notification requirements for UK entities, with the first notifications due on 1 September 2017 (and then by the end of the CbC reporting period thereafter); and
  • There is an additional information request requirement for UK entities whose ultimate parent does not file a CbC report that is adequate for UK reporting.

HMRC now estimate that about 300 UK-parented groups will need to file, together with up to 200 UK subsidiaries or branches of overseas groups (about half for just one year until the overseas parent files in its own jurisdiction).

Source & more info: Deloitte