For large businesses operating in the UK, the first country-by-country (CbC) reporting notification is due to Her Majesty's Revenue and Customs (HMRC) on September 1 for fiscal years beginning January 1, 2016.
CbC reporting, as we've written about previously in our 2016 summer/fall issue of OnPoint Magazine, applies in the UK to companies with sales of 750 million euros (in the U.S., the reporting requirement, set by the IRS, starts at $850 million).
Recently, HMRC introduced a requirement that, along with the full CbC report due, HMRC must also be notified by large UK companies (or those with a large presence in the UK) about where the company will be filing its CbC report (i.e., in which territory).
HMRC asks to be notified of the following:
- Name of the entity making the filing
- The entity's tax ID
- In which territory the CbC report will be filed
HMRC has said that only one report needs filing per group (including corporations, pass-through entities, branches, and other permanent establishments). Information on multiple entities can be reported at the same time.
There is no specific form required by HMRC; rather, HMRC, suggests including all relevant information on a spreadsheet and e-mailing the spreadsheet to HMRC at this dedicated e-mail mailbox: email@example.com
The normal CbC reporting deadline is to be at the end of the entity's accounting period, although for this first year of reporting, the deadline is September 1.
So, what does this mean for you? If your business meets the above-mentioned thresholds in the UK, the time to file is upon you. If you are a U.S. company meeting the IRS' thresholds, the IRS has stated that as of September 1, Form 8975 may be filed for early reporting periods (otherwise not due until next year's tax filing). It is time to review both the requirements and your information collection systems, so that you can be in compliance with the upcoming rules.