Public Country-by-Country Tax Reporting

There is a threat being felt by multinational companies, as there is increasing pressure for international full public country-by-country tax transparency. In recent years, jurisdictions, such as the European Union, have passed laws, and are currently working, to require multinational companies to report financials on a country-by-country basis.

Such regulation is set to control base erosion and profit-shifting strategies mainly taken by big multinational companies. Additionally, advocates of such a law also argue that it would benefit stakeholders by providing them with more information regarding the financial history of companies.

Recently, the Australian government has been working on implementing a public county-by-country requirement, and it is set to go into effect in July of the upcoming year as part of the “Organization for Economic Cooperation and Development's action plan for combating tax base erosion and profit shifting” (OECD BEPS), which is set to combat tax avoidance practices.

The United States does not have a public CbCR law; however, it does have a form of a CbC requirement that was implemented in 2017 on Form 8975. Organizations like the Financial Accountability and Corporate Transparency (FACT), however, have been pressuring the U.S. Securities and Exchange Commission and the Financial Accounting Standards Board to implement Public CbC Reporting requirements for multinational corporations, on the grounds that they take unfair tax avoidance practices.

There has also been increasing interest and push from investors for such a law as it would greatly contribute to their investment decisions.

Learn More About the U.S. Form 8975 Country-by-Country Report Filing Rules.