The OECD has issued a discussion paper on transfer pricing and country-by-country reporting. A little over ten years after I first introduced the idea of country-by-country reporting the OECD has finally got one of the key issues it is about.
But there is a worrying note at the end of the paper, where the OECD says:
The OECD looks forward to a productive discussion of these issues at the consultation on 12 — 13 November and requests business input into the resolution of these questions and any other questions business may believe to be relevant to the development of a workable country by country reporting template
The OECD ought to note that this initiative arose in civil society.
And there's quite a lot on a template, here.
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The way I read it, is that the OECD is noting it needs to come up with something as it is required under the BEPS initiative, but it is not wholly clear (from the BEPS initiative paper) what form that CBCR should take and what it should contain to be most useful to tax authorities to enable them to enforce transfer pricing rules.
They discuss some options around requirements and within that consider the impact on business and consider a number of possibilities for sourcing the data for CBCR. One example is to draw information from statutory accounts of each legal entity in a group. Another example is they could look to draw information from consolidated accounts but note that while some information should be readily obtainable from consolidation systems not all that is needed or required for CBCR will necessarily be readily available from those systems, so could mean additional compliance burden for the group.
They mention the need to balance getting useful information for tax authorities against the additional compliance burden that CBCR will place on businesses.
The way I read it was the meeting in November is to get some initial feedback from business to the various scenarios because they want to get a feel for how to get that balance right.
I don’t think there’s any indication that they want business to drive the process, or believe this is a business initiative, but they do require input from business to get to a viable/workable solution.