OECD discussion draft considers country-by-country reporting

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14 Feb 2014

The Organisation for Economic Co-operation and Development (OECD) has released a discussion draft of revised guidance on transfer pricing documentation and country-by-country reporting. The discussion draft is part of the process in responding to the OECD 'Action Plan on Base Erosion and Profit Shifting' (BEPS), a tax transparency initiative which is aimed to be implemented by the end of 2015.

The discussion draft follows an earlier summary of issues associated with country-by-country reporting which was published in October 2013. It includes a proposed 'model template' for confidential country-by-country reporting by taxpayers, which contains an overview of income, taxes and business activities on a country-by-country basis.

In relation to the determination of amounts, the discussion draft contains the following proposed guidance:

It is not required that the amounts of revenue or other financial information be reported using the same accounting standards for all Constituent Entities. Thus, revenue of a Constituent Entity organised in one country may be reported in IFRS if it uses IFRS in its accounts, and revenue of a Constituent Entity organised in another country may be reported in local GAAP if it uses local GAAP in its accounts. Taxpayers wishing to do so, however, may elect to report all amounts under consistent accounting principles and translated on a consistent basis to a single currency.

Many of the issues discussed in the discussion draft are relevant in the context of other calls for broader country-by-country reporting.

The discussion draft is open for comment until 23 February 2014. Click for OECD announcement (link to OECD website).

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