Country by Country Reporting refers to a recently introduced framework having major impacts on transparency of multinational enterprises and their operations.
Typically, multinational enterprises have functions located in different countries e.g. A major company has its headquarters in Country A, its research and development team is in County B, manufacturing is located in Country C and sales could be routed through Country D.
The above type of arrangement, very typical amongst multinational corporations has posed an issue with regards to tax returns as traditionally, tax authorities have no specific information on different operations if different countries and have struggled to find out where profits are booked for tax purposes.
This has also made audits even more difficult to carry out in order to determine if the appropriate tax liabilities have been met by the financial institutions involved.
The solution as specified by the OECD is a new country by country reporting template to specify where profits, sales, employees and assets are located along with where income tax is actually paid and accrued.
The Country by Country reporting framework requires tax authorities to share this information electronically across jurisdictions where the multinational operates (pursuant to tax treaties).
The first step in creating a CbC filing is to select Manage Filings > Create Filing from the main menu within Vizor Portal
Enter a name for the filing (which should be meaningful name in Production in order to easily retrieve CbCR filings at a later date).
CbC XML Upload Filing as the filing type should then be selected and a period end date should then be selected.
Note: The period end date is the last day of the reporting period. For CbC Reporting. This must be the last day of the Reporting Fiscal Year and the year must be equal to the year being reported for.
As per other filing types, once the CbCR filing has been created, it should be available within the Draft Filings section. Simply click the name of the filing to access it.
It is not possible to edit any part of the filing manually. Data must be supplied in an XML data file compliant with the CbC XML schema v.1.0 specification as published by the OECD.
Click the Upload Data button on the right hand side.
You now need to browse for your XML file.
The system will begin validation of your file immediately against the OECD CbC XML schema and business rules.
If the filer has uploaded a file that is not an XML file, he/she will see an error message on the Upload Data page informing you of that error.
If the filer does not receive any error message on the Upload XML page, the file will be submitted for processing and additional validation will be applied.
The filer should then receive a system-generated email when the processing is complete, indicating either the submission was successful, or that the submission was unsuccessful and that the file must be updated and resubmitted.