Country by country reporting regulations

The Taxes (Base Erosion and Profit Shifting) (Country by Country) Reporting Regulations, SI 2016/237, set out the details of the new statutory requirement for multinational companies, or their UK sub-groups, to make an annual country by country report to HMRC showing the following information for each tax jurisdiction in which they do business:

·        the amount of revenue, profit before income tax and income tax paid and accrued

·        their total employment, capital, retained earnings and tangible assets

·        broad details of the type of business activity carried out by each group entity in a particular tax jurisdiction

The regulations apply to any UK-resident ultimate parent entity of a multinational enterprise with a consolidated group turnover of €750m or more in an accounting period commencing before, but ending after 31 December 2015, or commencing on or after 1 January 2016. Companies will have 12 months from the end of the period to file a report. The regulations also specify that where the ultimate parent is resident in a non-reporting jurisdiction, the top UK entity of a multinational must file a report covering all entities within the sub-group it controls. Multinationals with a UK presence may also voluntarily file a country by country report with HMRC where the ultimate parent is resident in a non-reporting jurisdiction. The regulations come into force on 18 March 2016.