Country by country reporting: filing notification with HMRC
HMRC’s notification requirements vary depending on where the ultimate parent entity (UPE) is tax resident, the circumstances of the multinational enterprise (MNE) group and the status of CBC reporting sharing arrangements between the UK and other countries.
This commentary sets out the CBC reporting notification requirements in the UK, including clarification on when a second notification is required for MNE groups that are tax resident outside the UK since there are circumstances where only one notification is required.
If the UPE is UK tax resident
First notification: Where the UPE of a multinational enterprise group (MNE group) is tax resident in the UK, the UK UPE must provide a notification to HMRC by the year-end of the period to which the CBC report relates.
For completeness, a second notification is not required.
If the UPE is tax resident outside the UK
First notification: Where the UPE is tax resident outside of the UK, the UK constituent entities of the MNE group must provide a notification to HMRC by the year-end of the period to which the CBC report relates. Where the MNE group has more than one UK constituent entity, only one notification is required, provided that details of all UK constituent entities (including dormant entities) have been included in the notification filed.
Second notification: A second notification to HMRC may or may not be due depending on the MNE group’s circumstances.
The UK constituent entity must provide a second notification to HMRC before the filing due date of the CBC report, where one of the following conditions is met:
the UPE is not required to file a CBC report in the jurisdiction in which it is tax resident (e.g. CBC reporting regulations have not been introduced or CBC filing is not yet mandatory in the country where the UPE is tax resident);
the jurisdiction in which the UPE is tax resident has entered into an international agreement but has not entered into arrangements to exchange CBC reports with the UK; or
the jurisdiction in which the UPE is tax resident has entered into arrangements to exchange CBC reports with the UK, but HMRC has notified the group that the arrangements are not operating effectively. (To date, due to the early stages of CBC reporting, we have not yet seen this in operation.)
However, where the UPE is required to file a CBC report in the jurisdiction in which it is tax resident and there are effective CBC reporting sharing arrangements in place between that jurisdiction and the UK, a second notification is not required.
The second notification either reaffirms the first notification, or revises the position if the filing location has changed from the time the first notification was filed. Where a second notification is required, this is due before the filing due date of the CBC report.
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Country by country reporting: filing notification with HMRC
HMRC’s notification requirements vary depending on where the ultimate parent entity (UPE) is tax resident, the circumstances of the multinational enterprise (MNE) group and the status of CBC reporting sharing arrangements between the UK and other countries.
This commentary sets out the CBC reporting notification requirements in the UK, including clarification on when a second notification is required for MNE groups that are tax resident outside the UK since there are circumstances where only one notification is required.
If the UPE is UK tax resident
First notification: Where the UPE of a multinational enterprise group (MNE group) is tax resident in the UK, the UK UPE must provide a notification to HMRC by the year-end of the period to which the CBC report relates.
For completeness, a second notification is not required.
If the UPE is tax resident outside the UK
First notification: Where the UPE is tax resident outside of the UK, the UK constituent entities of the MNE group must provide a notification to HMRC by the year-end of the period to which the CBC report relates. Where the MNE group has more than one UK constituent entity, only one notification is required, provided that details of all UK constituent entities (including dormant entities) have been included in the notification filed.
Second notification: A second notification to HMRC may or may not be due depending on the MNE group’s circumstances.
The UK constituent entity must provide a second notification to HMRC before the filing due date of the CBC report, where one of the following conditions is met:
the UPE is not required to file a CBC report in the jurisdiction in which it is tax resident (e.g. CBC reporting regulations have not been introduced or CBC filing is not yet mandatory in the country where the UPE is tax resident);
the jurisdiction in which the UPE is tax resident has entered into an international agreement but has not entered into arrangements to exchange CBC reports with the UK; or
the jurisdiction in which the UPE is tax resident has entered into arrangements to exchange CBC reports with the UK, but HMRC has notified the group that the arrangements are not operating effectively. (To date, due to the early stages of CBC reporting, we have not yet seen this in operation.)
However, where the UPE is required to file a CBC report in the jurisdiction in which it is tax resident and there are effective CBC reporting sharing arrangements in place between that jurisdiction and the UK, a second notification is not required.
The second notification either reaffirms the first notification, or revises the position if the filing location has changed from the time the first notification was filed. Where a second notification is required, this is due before the filing due date of the CBC report.
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