The Latest IOTA Report on Implementation of Country-By-Country Reporting into Internal Rules and Procedures is Now Available Online

The Country-by-Country (CbC) reporting is one of the 4 minimum standards of the Base Erosion and Profit Shifting (BEPS) project. CbC reporting requires Multinational Enterprises (MNEs) to report financial information on their activities and supply it to the jurisdiction where they are headquartered. This information is then exchanged with all jurisdictions that have implemented CbC reporting and where the MNE has a presence. This high-level overview of MNE activities is a valuable tool for tax administrations, helping them understand the MNE, how it operates, and identify transfer pricing and BEPS risks. Introduced in 2016, CbC reporting has now been implemented by over 120 jurisdictions, covering almost all MNE groups with consolidated group revenue at or above the EUR 750 million threshold.

Initially, a report based on data provided by 25 IOTA member tax administrations participating in a country survey in October 2018 was issued in February 2021 to understand how IOTA member tax administrations are implementing ‘CbC Reporting’ mechanisms.

In such an evolving environment, where tax issues change so rapidly, CbC was endorsed by so many tax administrations, while its exchange assisted in the enhancement of the quality of data received, so as to make more targeted tax audits, and gain a more precise understanding of MNEs operations. Therefore, it was identified that the 2021 report needed to be updated based on more current data.

International Taxation Expert Alexandros Roukalis led the project from the IOTA Secretariat, who monitored the overall progress, drafted the action plan and the roadmap of the project, while also promoting the effective collaboration among members. The IOTA Subgroup was coordinated by Simon Kimber from the United Kingdom, who coordinated subgroup members, allocated tasks, and had an overall view of the project. The Subgroup's work was enriched by the expertise of a diverse group of specialists from IOTA member tax administrations, including Werner Handler-Brosch, from Austria, Geert Stuer from Belgium, Juho Suomi from Finland, Páli Regő Bálint from Hungary, Georgia Thoikou from Greece, and Ola Holdal from Norway.

Their teamwork produced a detailed report, based on data provided by 23 IOTA member tax administrations participating in a country survey conducted in June 2024, to understand the usage and challenges for IOTA member tax administrations, through the implementation of ‘CbC Reporting’ data. Several country examples and statistics have been included, so as to make the report more legible and provide a more complete picture.

The report discusses the following aspects of CbC Reporting:

• Under Reporting
• Data Quality Issues
• Notifications
• Fines
• Accessing CbC Reports
• Using CBCR data for risk assessment
• Success Stories
• Other usage of CbCR data

IOTA member tax officials can access the reports via the link below:

IOTA Report on Implementation of Country-By-Country Reporting into Internal Rules and Procedures

IOTA expresses sincere gratitude to all subgroup members and participating tax administrations for their dedication and expertise in bringing this project to completion.