The Netherlands meets all terms on BEPS Action 13 CbC reporting

The OECD concludes in its first peer review on BEPS Action 13 Country-by-Country (CbC) reporting that the Netherlands meets all terms.

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Written by:
Jeroen Geers Manager Tax Advisory
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The OECD has released the first peer reviews of the Country-by-Country (CbC) reporting initiative, demonstrating strong progress toward the imminent implementation of a key element in continuing efforts to improve taxation of multinational enterprises (MNEs) worldwide.

The peer reviews show that practically all countries that serve as headquarters to the large MNEs covered by the initiative have introduced new reporting obligations compliant with transparency requirements.

Country-by-Country reporting, with exchanges slated to begin in June 2018, will see tax administrations worldwide collect and share detailed information on all large MNEs doing business in their country. Information collected includes the amount of revenue reported, profit before income tax, and income tax paid and accrued, as well as the stated capital, accumulated earnings, number of employees and tangible assets, broken down by jurisdiction. More than 1400 bilateral relationships are already in place for CbC exchanges, with more to come throughout the year.

Under the Action 13 Minimum Standard, jurisdictions have committed to foster tax transparency by requesting the largest multinational enterprise groups (MNE Groups) to provide the global allocation of their income, taxes and other indicators of the location of economic activity. This unprecedented information on MNE Groups’ operations across the world will boost tax authorities’ risk-assessment capabilities. The Action 13 Minimum Standard has been translated into specific terms of reference and a methodology for the peer review process. The peer review of the Action 13 Minimum Standard is proceeding in stages with three annual reviews in 2017, 2018 and 2019. The phased review process follows the phased implementation of Country-by-Country (CbC) Reporting. Each annual peer review process will therefore focus on different aspects of the three key areas under review:

  • the domestic legal and administrative framework;
  • the exchange of information framework; and
  • the confidentiality and appropriate use of CbC reports.

In respect to the abovementioned three points the OECD conclude that the Netherlands:

  • The Netherlands has a domestic legal and administrative framework to impose and enforce CbC requirements on MNE Groups whose Ultimate Parent Entity is resident for tax purposes in the Netherlands. The Netherlands meets all terms of reference relating to the domestic legal and administrative framework.
  • Against the backdrop of the still evolving exchange of information framework, at this point in time, the Netherlands meets the terms of reference regarding the exchange of information framework.
  • There are no concerns to be reported for the Netherlands. The Netherlands thus meets these terms of reference.

More information can be found at the website of the OECD.

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