County by country (CBC) reporting is a risk assessment tool that is here to stay and the associated obligations are likely to expand over time. The first CBC reports were due for many multinationals on 31 December 2017 and the first automatic exchange of CBC reports between jurisdictions will take place by 30 June 2018. Groups should therefore expect their CBC reports to be scrutinised by tax authorities and for evidence of this to filter through into their risk assessments and the direction of tax audits with even more focus on transfer pricing. The key to successful management of CBC reporting is to understand the results in the context of a group’s business. Considerations for groups include: establishing a global documentation strategy which utilises the combination of the master file and the local file to best explain their business in a clear and consistent way; reviewing their data...
