The new register of countries exchanging Country-by-Country reports (CbC reports) will include 45 countries and 10 territories. The Federal Tax Service plans to exclude 27 EU countries from the current list, which unilaterally refused automatic exchange with Russia.
The Federal Tax Service has prepared a draft updated list of countries with whose competent authorities automatic exchange of country reports is conducted. CbC report is part of three-tier transfer pricing documentation within the framework of BEPS that reflects the indicators of multinational enterprises (MNEs) in the countries where the participants of such groups conduct business.
The current list includes 67 countries and eight territories.
The current list includes 67 countries and eight territories.
The Federal Tax Service plans to exclude from it 27 EU member states that unilaterally stopped the automatic exchange of country reports with Russia: Austria, Belgium, Bulgaria, Hungary, Germany, Greece, Denmark, Ireland, Spain, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Finland, France, Croatia, the Czech Republic, Sweden and Estonia.
At the same time, the Federal Tax Service proposed to include Albania, Cameroon, the Dominican Republic, Mauritania, Papua New Guinea, the territories of Montserrat, and the Faroe Islands in the list. Transfer pricing documentation must be submitted by the largest groups whose consolidated revenue for the financial year exceeded € 750 million. Country-by-country information includes:
As a general rule, the mother company of the group must send a report to the tax authority of the country of which it is a tax resident. The latter, in turn, must exchange the report with the tax authorities of the countries in which other participants of such a group are located.
However, Russian tax authorities have the right to request a CbC report submitted by the mother company from a Russian company that has filed a CbC Notification (notification of participation in MNEs). The CbC report must be submitted only in electronic form in XML format. Thus, the Russian company will have to convert the report received from the mother company to the electronic format approved by the Russian Federal Tax Service.
- information on income, expenses, profit or loss;
- information on the main indicators that characterize the activities of the participants;
- information on the amounts of taxes calculated and paid to the national and foreign budgets.
As a general rule, the mother company of the group must send a report to the tax authority of the country of which it is a tax resident. The latter, in turn, must exchange the report with the tax authorities of the countries in which other participants of such a group are located.
However, Russian tax authorities have the right to request a CbC report submitted by the mother company from a Russian company that has filed a CbC Notification (notification of participation in MNEs). The CbC report must be submitted only in electronic form in XML format. Thus, the Russian company will have to convert the report received from the mother company to the electronic format approved by the Russian Federal Tax Service.
