Country-by-Country Reporting
Compliance
Tax Executives Institute: Carolinas Chapter
September 25, 2015 | Raleigh, NC
Presenter:
Mary Bennett (Washington, DC)
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© 2015 Baker & McKenzie LLP
Your presenter
Mary Bennett
Washington, DC
mary.bennett@bakermckenzie.com
(202) 452-7045
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Agenda
Today’s topics
‒ Introduction to BEPS Action 13
‒ Preparation of the CbC report
‒ Implementation of CbC requirements by governments
‒ Related developments to monitor
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Introduction to BEPS Action 13
Action 13: CbC Reporting -- Background
‒
Pressure has been building for years to require greater transparency
of MNEs’ tax payments on a CbC basis



‒
Started as effort to hold (developing country) governments accountable
for revenues from extractive industries (e.g. EITI, PWYP, Dodd-Frank)
NGOs began to advocate public disclosure as a means to combat
corporate tax avoidance
Some NGOs have candidly advocated public CbC reporting as a step
needed to move away from the arm’s length principle and toward global
formulary apportionment
Increased information reporting to tax authorities is highest priority
BEPS response for OECD and many countries
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Action 13: Status of guidance
‒ September 2014 Action 13 Report – laid out framework
of required documentation, left open issues of
implementation
‒ February 2015 Guidance – addressed issues of who
must file, when, with whom, and how information could
be used
‒ June 2015 Implementation Package – contained model
CbC legislation and model competent authority
agreements
‒ October 2015 Final Report – expected to consolidate
prior guidance
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Action 13: CbC Reporting -- Background
‒ September 2014 Action 13 Report established three
goals for transfer pricing documentation:



providing tax administrators with data necessary to perform risk
assessments;
ensuring that taxpayers meet requirements and appropriately
report income in transfer pricing transactions; and
permitting tax administrations with the required information to
audit transfer pricing practices
‒ The main innovation of the Guidance is to focus not on
documentation of related party transactions, but on "risk
assessment."
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Action 13: CbC Reporting — TPD framework
‒ The Guidance proposed a three-tiered structure
consisting of:



a master file containing standardized information relevant for
all MNC group members
a local file referring specifically to material transactions of the
local taxpayer; and
a country-by-country report containing certain information
relating to the global allocation of the MNC's income and taxes
paid together with certain indicators of the location of economic
activity within the MNC group
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Action 13: TPD — Master File
‒ Master File


MNC group's organizational chart
Description of the MNC's business(es) (including profit drivers, major
product supply chain, intercompany service agreements, main
geographic markets, brief functional analysis for entities, recent
restructurings/M&A)

MNC's intangibles, e.g., list of intangibles important for transfer pricing
with legal owner(s) and a general description of group's transfer pricing
policies for R&D and intangibles
MNC's intercompany financial activities, e.g., related and unrelated
financing


MNC's financial and tax positions: APAs and tax rulings relating to
allocation of income
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Action 13: TPD — Local File
‒ Local File



Local entity information, including management structure and local
organization chart
Detailed description of specific intercompany transactions between
local country and entities in other countries, and copies of all material
intercompany agreements executed by that entity
Includes relevant financial information regarding transactions,
comparability analysis, and selection and application of the transfer
pricing method
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Action 13: CbC Reporting -- Contents
‒ CbC Report



Aggregate CbC data about entities (and PEs) in every country to go
to every tax administration (not public)
Proposed CbC template includes:

Revenues (broken down by unrelated party, related party, and
total)




Profit (loss) before income tax
Income tax paid (on cash basis)
Income tax accrued – current year
Stated capital and accumulated earnings


Number of employees
Tangible assets other than cash and cash equivalents
Option to use “bottom-up” or “top-down” approach
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Action 13: CbC Reporting -- Implementation
‒
‒
Implementation issues left open in September 2014:





With which government(s) should CbC report be filed
What confidentiality restrictions will apply
For what year will first report be required
When will report be due
What groups must file report


What restrictions will there be on countries’ use of report
How will consistency of requirements be achieved and maintained
February 2015 Implementation Guidance addresses some issues
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Action 13: CbC Reporting — Feb. 2015 Guidance
‒ Who files, where, and when:





Recommendation for master file and local file to be filed locally
in each country
Agreement parent company country should provide CbC
report through automatic EOI to eligible countries
First CbC reports recommended to be filed for years beginning
in 2016 (some countries may need more time); participating
countries agree no reporting for earlier years to be required
Taxpayers to have 12 months after year-end to file
Only groups with > €750M consolidated group revenue in prior
year to be required to file
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Action 13: CbC Reporting — Feb. 2015 Guidance
‒ Participating countries agree to conditions
underpinning obtaining and using CbC reports:



Confidentiality
Consistency
Appropriate use
‒ Mechanisms will be developed to monitor countries’
compliance with their commitments, in addition to 2020
review of implementation
‒ Agreement to develop implementation package:


Parent country legislation / sub country “secondary
mechanisms”
Implementing agreements for AEOI
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CbC reporting and confidentiality
This will not please the
NGOs but the CbCR
information will go to tax
administrations only. This
is extremely sensitive
Information.
Pascal SaintAmans
OECD
This exclusion will not help
rebuild citizens’ trust in global
businesses’ wealth creating
mission for societies.
Pierre Habbard
Trade Union Advisory Committee
© 2015 Baker & McKenzie LLP
June 2015 Implementation Package (1/2)
‒ Model CbC legislation – overview

Designed as model legislation which could be used by
countries to require ultimate parent entity of an MNE
group to file CbC report in its country of residence

Includes backup “secondary” mechanism for requiring
filing by local subsidiary in certain circumstances

Expected that jurisdictions could adapt the model
legislation to their domestic legal systems
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June 2015 Implementation Package (2/2)
‒ Model Competent Authority Agreements (MCAAs)

Designed to implement AEOI of CbC reports under EOI
provisions of tax treaty, TIEA, or Multilateral Convention
on Mutual Administrative Assistance in Tax Matters

Addresses timing and scope of AEOI, conditions
regarding confidentiality, data safeguards, and
appropriate use

Includes detailed questionnaire on confidentiality and data
safeguards
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Preparation of the CbC report
Preparing to comply
‒
Conducting dry runs
‒
Understanding accounting system / software and
capabilities
‒
Identifying interpretive issues in OECD guidance
‒
Achieving collaboration across corporate departments,
including tax, treasury, IT, and Finance, and best practices
regarding the same
‒
Analyzing benefits and pitfalls of a “top down” versus
“bottom up” approach
‒
Developing a strategy regarding narrative
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Some data items (1/7)
‒ Countries included:

All tax jurisdictions in which the MNE group has an entity
resident for tax purposes

Apparently includes disregarded entities if considered
tax resident in a jurisdiction

Separate line for all entities not resident in any country

Dual resident entities – use treaty tie-breaker or POEM
test

Partnerships? Not resident anywhere? Proportionately
resident in partners’ jurisdictions? Treated like dual
residents?
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Some data items (2/7)
‒ Entities included:

“Constituent Entities” -- any separate business unit of
the MNE group (company, corporation, trust, partnership
etc.) that is included in the consolidated group for
financial reporting purposes

No materiality threshold

PE is a Constituent Entity if it has a separate income
statement for regulatory purposes, financial reporting,
internal management or tax purposes (most of its data is
reported separately by reference to jurisdiction where it
is located)
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Some data items (3/7)
‒ Source of data:

Can be “top down” or “bottom up”

“Top down” refers to data from the group’s consolidation
reporting packages

“Bottom up” refers to separate entity financial
statements, regulatory financial statements, or internal
management accounts

Group should consistently use same sources year to
year, should describe sources used and explain any
change in source of data
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Some data items (4/7)
‒ Reportable period can be either:

Information for the fiscal year of the relevant Constituent
Entities ending with or within the fiscal year of the parent
Reporting MNE, or

Information for all the relevant Constituent Entities
reported for the fiscal year of the Reporting MNE
‒ Approach should be consistently applied
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Some data items (5/7)
‒ Aggregation (versus consolidation) of items of the
Constituent Entities resident in each jurisdiction
‒ Revenues – exclude amounts from Constituent Entities
treated as dividends by payor’s jurisdiction
‒ Cash tax paid – includes taxes paid by Constituent
Entities to their residence jurisdiction and other
jurisdictions (e.g., withholding taxes imposed on
payment they received)

E.g. Mexican withholding tax on payment to US
company reported as tax paid by US entity
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Some data items (6/7)
‒ Current year income tax accrued – should exclude
deferred tax and provisions for uncertain tax liabilities
‒ PE’s stated capital and accumulated earnings – should
be reported as part of the PE’s legal entity numbers
‒ Number of employees




Refers to FTE employees
Can do snapshot or average, but must be consistent across
entities and years
Can include independent contractors participating in ordinary
activities of business
Rounding permissible if not distortive
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Some data items (7/7)
‒ Tangible assets other than cash and cash equivalents

Report net book value of assets fo Constituent Entities
resident in the jurisdiction (without regard to where
assets are located, unless attributable to a PE)
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Action 13: CbC Reporting -- Responses
‒
‒
‒
‒
‒
Analyze ability to collect and process data (sources of data points,
responsibilities, systems requirements)
Eliminate unneeded entities
Identify potential “hot” data points (especially high profit, zero tax
jurisdictions) and consider whether to restructure
Consider potential explanatory supplement
Monitor implementation by governments
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Implementation by
governments
CbC reports – confidentiality
‒
Participating countries agree jurisdictions should have in place
and enforce legal protections of confidentiality as a condition for
obtaining and using the CbC report

Protection should be at least equivalent to that for info obtained
under EOI provisions of treaties / TIEAs / MCMAATM, which say:

Information obtained through EOI to be treated as secret to same extent
as info obtained under domestic laws (relevant only where country
obtains CbC report through EOI)

Information shall be disclosed “only to persons or authorities (including
courts and administrative bodies) concerned with the assessment or
collection of, the enforcement or prosecution in respect of, the
determination of appeals in relation to” the jurisdiction’s taxes or the
oversight of the above (MTC Article 26)

Information disclosed shall be used only for such purposes
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CbC reports -- consistency
‒ Participating countries agree jurisdictions should meet
certain consistency requirements as a condition for
obtaining and using the CbC report

They agree to use “best efforts” to adopt a legal
requirement that locally-parented MNEs file CbC report

They agree to use the standard template in the TPG –
no additions or omissions
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CbC reports – appropriate use (1/2)
‒
‒
Participating countries agree jurisdictions should meet an
“appropriate use” requirement as a condition for obtaining and
using the CbC report – so info may be used for:


High-level transfer pricing risk assessment
Evaluating other BEPS-related risks


Economic and statistical analysis
Making further inquiries on audit
Info may not be used:


As a substitute for a detailed TP analysis of individual transactions and
prices based on a full functional analysis and a full comparability
analysis
To propose TP adjustments based on global formulary apportionment
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CbC reports – appropriate use (2/2)
‒ Participating countries further agree:



If CbC info is used by local tax administration to make a
formulary apportionment-based adjustment, that country’s
competent authority will “promptly cede” the adjustment in any
relevant MAP proceeding
Where CbC info was provided through tax treaty EOI, MAP will
be available
Where CbC info was provided through other EOI, the
competent authority EOI agreement will incorporate “a
mechanism for competent authority procedures to discuss with
the aim of resolving cases of undesirable economic outcomes,
including if such cases arise for individual businesses”
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CbC reports – EOI framework
‒
Participating countries agreed on following framework:



Jurisdictions should require timely CbC reports from locallyparented MNEs
Jurisdictions should provide those reports through automatic
EOI to countries that meet the confidentiality, consistency, and
appropriate use conditions
A “secondary mechanism” (requiring local filing in sub country
or moving central filing obligation to a lower tier country) would
be acceptable where eligible sub countries do not receive
report from parent country because:


No CbC report required in parent country
No CA agreement timely in place to provide for AEOI

Parent country has failed to comply with AEOI agreement
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Model CbC Legislation
Model CbC legislation -- contents
‒ Article 1: Definitions
‒ Article 2: Filing obligation
‒ Article 3: Notification
‒ Article 4: Country-by-Country report
‒ Article 5: Time for filing
‒ Article 6: Use and confidentiality of CbC report
information
‒ Article 7: Penalties
‒ Article 8: Effective date
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Model CbC legislation – Article 1
(Definitions)
‒
‒
Definitions of terms such as “MNE Group”, “Constituent Entity”
(including PEs) based on September 2014 Report
Some definitions reflect February 2015 guidance, e.g.:
 “Excluded MNE Group” – having consolidated group revenue
on Consolidated Financial Statements of less than 750 million
Euro


Query: Can an MNE Group be “Excluded MNE Group” if has no
Consolidated Financial Statements?
“Reporting Entity”:


Generally, the Ultimate Parent Entity
Group may appoint “Surrogate Parent Entity” where for certain
reasons CbC information would not be available from jurisdiction
of Ultimate Parent Entity
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Model CbC legislation – Article 1
(Definitions) (cont’d)
‒ “International Agreement” – legal instrument
authorizing automatic EOI – can be:

Multilateral Convention for Mutual Administrative
Assistance in Tax Matters, (MCMAA)

tax treaty, or

TIEA
‒ “Qualifying Competent Authority Agreement” (QCAA) –
CA agreement pursuant to International Agreement,
requiring AEOI of CbC reports
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Model CbC legislation – Article 1
(Definitions) (cont’d)
‒
“Systemic Failure” – refers to situation where a country is not
providing CbC reports through AEOI – specifically:
 The term “Systemic Failure” with respect to a jurisdiction
means that a jurisdiction has a QCAA in effect with [Country],
but has suspended AEOI (for reasons other than those that
are in accordance with the terms of that Agreement) or
otherwise persistently failed to automatically provide to
[Country] CbC reports in its possession of MNE Groups that
have Constituent Entities in [Country].
 Query: what if a jurisdiction hasn’t concluded an International
Agreement with [Country] due to concerns about [Country]’s
confidentiality / data safeguard standards?
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Model CbC legislation – Article 2 (Filing
Obligation)
‒
‒
Paragraph 1: imposes CbC filing obligation on Ultimate Parent
Entity resident in [Country]
Paragraph 2: secondary mechanism, imposes CbC filing
obligation on subsidiary resident in [Country] if:
 Ultimate Parent not required to file in its country,
 Ultimate Parent’s country has an International Agreement with
[Country] but no QCAA in effect by filing deadline
 There has been a “Systemic Failure” by Ultimate Parent’s
country which has been notified to local sub by [Country Tax
Administration]
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Model CbC legislation – Article 2 (Filing
Obligation) (cont’d)
‒ Note that existence of International Agreement
authorizing AEOI won’t guarantee that CbC reports will
be exchanged – e.g.:


“[T]he IRS is not required to exchange information with another
country, even if an information exchange agreement is in effect,
if there are concerns about confidentiality, safeguarding of data
exchanged, the use of the information, or other factors that
would make the exchange of information inappropriate.” (Rev.
Proc. 2014-64)
“David Varley, acting director of the IRS Transfer Pricing
Operations group, said U.S. may block automatic exchange of
country-by-country data to countries that don't provide reciprocal
information.” (BNA Daily Tax Report, April 24, 2015)
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Model CbC legislation – Article 2 (Filing
Obligation) (cont’d)
Per Rev. Proc. 2014-64, countries with which US has International Agreement
authorizing EOI are these (85+):
‒
Antigua & Barbuda, Aruba, Australia, Austria, Azerbaijan, Bangladesh, Barbados, Belgium,
Bermuda, Brazil, British Virgin Islands, Bulgaria, Canada, Cayman Islands, China, Colombia,
Costa Rica, Croatia, Curacao, Cyprus, Czech Republic, Denmark, Dominica, Dominican
Republic, Egypt, Estonia, Finland, France, Germany, Gibraltar, Greece, Grenada, Guernsey,
Guyana, Honduras, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Isle of Man, Israel,
Italy, Jamaica, Japan, Jersey, Kazakhstan, Korea (South), Latvia, Liechtenstein, Lithuania,
Luxembourg, Malta, Marshall Islands, Mauritius, Mexico, Monaco, Morocco, Netherlands,
Netherlands island territories: Bonaire, Saba, and St. Eustatius, New Zealand, Norway,
Pakistan, Panama, Peru, Philippines, Poland, Portugal, Romania, Russian Federation, Slovak
Republic, Slovenia, South Africa, Spain, Sri Lanka, St. Maarten (Dutch part), Sweden,
Switzerland, Thailand, Trinidad and Tobago, Tunisia, Turkey, Ukraine, United Kingdom,
Venezuela
Countries with which US has determined AEOI of bank info is appropriate are
these (18):
‒
Australia, Canada, Denmark, Finland, France, Germany, Guernsey, Ireland, Isle of Man, Italy,
Jersey, Malta, Mauritius, Mexico, Netherlands, Norway, Spain, United Kingdom
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Model CbC legislation – Article 2 (Filing
Obligation) (cont’d)
‒
Tax Notes Today, February 25, 2015:
David Varley, acting director of transfer pricing operations in the IRS Large Business
and International Division, said the IRS's recent experience with large AEOI projects
under FATCA and the CRS "lends some insights into exactly how much work it will
be for tax administrators both in the United States and the rest of world."
Varley noted that confidentiality risks are higher when large volumes of information
are exchanged. To eliminate some of the risks, the IRS has committed to meeting
with every country that it exchanges information with under FATCA, Varley said.
"That's about a day and a half of going over the [International Data Safeguards &
Infrastructure] workbook," he said. There are two teams in the field making country
visits, and each team can do approximately four to five visits per month, he said.
"When you start looking at review of the domestic law and procedures for
safeguarding and infrastructure in the context of CbC, I think it raises interesting
issues that are unique to it," Varley said.
‒
Doug O’Donnell, June 12, 2015: Country reviews are “very
enlightening, time-consuming, difficult”
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Model CbC legislation – Article 2 (Filing
Obligation) (cont’d)
‒ Local sub can be required to file where there’s “systemic
failure” by Ultimate Parent’s country

Can include having a QCAA but not living up to its terms

What about not having an International Agreement at all?

Does that come within “or otherwise persistently failed to
automatically provide to [Country] CbC reports in its
possession”?
‒ Where there is more than one local sub, MNE group can
designate one to file the CbC report on behalf of the
group
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Model CbC legislation – Article 2 (Filing
Obligation) (cont’d)
‒ Paragraph 3: notwithstanding paragraph 2, local sub
won’t be required to file if group has appointed a
Surrogate Parent Entity and:





Surrogate Parent’s country requires CbC filings,
Surrogate Parent’s country has a QCAA in effect covering CbC
reports
Surrogate Parent’s country hasn’t notified [Country tax
administration] of a Systemic Failure
Surrogate Parent’s country has been notified by entity that it’s
acting as Surrogate Parent, and
Surrogate Parent has notified [Country tax administration] of its
status
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Model CbC legislation – Article 3
(Notification)
‒ A local Constituent Entity shall notify [Country Tax
Administration] by last day of Reporting Fiscal Year if it
is Ultimate Parent Entity or Surrogate Parent Entity
‒ A local Constituent Entity which is not the Ultimate
Parent or Surrogate Parent shall notify [Country Tax
Administration] which group entity is
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Model CbC legislation – Article 4 (CbC
report)
‒ Paragraph 1: lists contents required, same as CbC
template
‒ Paragraph 2: CbC report shall be filed in form identical
to and using definitions and instructions in standard
template contained in:

[Annex III of Ch. V of TPG, as amended from time to time]

[Annex III of [final BEPS Action 13 Report]], or

[Appendix to this law]
‒ Query: presumably Appendix must conform to Annex
III?
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Model CbC legislation – Article 5 (Time for
filing)
‒
‒
No later than 12 months after the last day of the Reporting Fiscal
Year
September 2014 Report:

‒
“With regard to the country-by-country report, it is recognised that in some
instances final statutory financial statements and other financial information that
may be relevant for the country-by-country data described in Annex III may not
be finalised until after the due date for tax returns in some countries for a given
fiscal year. Under the given circumstances, the date for completion of the
country-by-country report described in Annex III to Chapter V of these
Guidelines may be extended to one year following the last day of the fiscal year
of the ultimate parent of the MNE group.”
“U.S. officials are considering whether to require U.S. companies that must
file a country-by-country template to do so along with their tax returns,
according to Brian Jenn, an attorney-adviser in the Treasury Department
Office of Tax Policy.” (BNA Daily Tax Report, June 15, 2015)
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Model CbC legislation – Article 6 (Use and
confidentiality of the CbC report info)
‒ May be used “for purposes of assessing high-level
transfer pricing risks and other base erosion and profit
shifting related risks in [Country], including assessing
the risk of non-compliance by members of the MNE
Group with applicable transfer pricing rules, and where
appropriate for economic and statistical analysis”
‒ TP adjustments not to be based on it
‒ Confidentiality to be preserved “at least to the same
extent that would apply if such information were
provided to it under the provisions of the [MCMAA]”
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Model CbC legislation – Article 7 (Penalties)
‒ “This model legislation does not include provisions
regarding penalties to be imposed in the event a
Reporting Entity fails to comply with the reporting
requirements for the country-by-country report. It is
assumed that jurisdictions would wish to extend their
existing transfer pricing documentation penalty regime
to the requirements to file the country-by-country report.”
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Model CbC legislation – Article 8 (Effective
Date)
‒ “This [title of the law] is effective for Reporting Fiscal
Years of MNE Groups beginning on or after [1 January
2016].”
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Model competent authority
agreements
Multilateral Competent Authority Agreement
(MCAA) -- jurisdictions eligible to sign
‒
Those that “are Parties of, or territories covered by, the MCMAA or
the MCMAA as amended by the Protocol (the “Convention”) or
have signed or expressed their intention to sign the Convention”


‒
N.B. MCMAA was developed jointly by the OECD and the Council of
Europe in 1988; it was amended by Protocol in 2010 to align it to the
international standard on exchange of information on request and to
open it to all countries
More than 60 countries have signed, but the amended Convention is
not yet in force in Andorra, Brazil, Cameroon, Chile, China, El
Salvador, Gabon, Germany, Guatemala, Liechtenstein, Monaco,
Morocco, Philippines, San Marino, Saudi Arabia, Seychelles,
Singapore, Switzerland, Turkey, and the United States
MCAA signatories acknowledge MCMAA must be in effect for
them before AEOI on CbC can take place
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Pre-conditions to exchange
‒ Preamble states participating Jurisdictions “will have, or
are expected to have in place by the time the first
exchange of CbC Reports takes place”:
i.
appropriate safeguards to ensure that the information
received pursuant to this Agreement remains confidential
and is used for the purposes of assessing high-level
transfer pricing risks and other base erosion and profit
shifting related risks, as well as for economic and
statistical analysis, where appropriate,
ii.
[…/…]
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Pre-conditions to exchange (cont’d)
ii.
the infrastructure for an effective exchange relationship
(including established processes for ensuring timely,
accurate, and confidential information exchanges,
effective and reliable communications, and capabilities to
promptly resolve questions and concerns about
exchanges or requests for exchanges and to administer
the provisions of Section 4 of this Agreement [re
collaboration on enforcement and compliance) and
iii. the necessary legislation to require Reporting Entities to
file the CbC Report.
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Aim to avoid double taxation?
‒ Preamble states participating “Jurisdictions are
committed to discuss with the aim of resolving cases of
undesirable economic outcomes, including for
individual businesses, in accordance with paragraph 2
of Article 24 of the Convention, as well as paragraph 1
of Section 6 of this Agreement”

Appears to be aimed at addressing situations where a
country might make a formulary apportionment-based
assessment, creating double taxation, in circumstances
where MAP is not available
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MCAA Sections
‒ Section 1: Definitions
‒ Section 2: Exchange of Information with respect to
MNE Groups
‒ Section 3: Time and Manner of Exchange of Info
‒ Section 4: Collaboration on Compliance and
Enforcement
‒ Section 5: Confidentiality, Data Safeguards and
Appropriate Use
‒ Section 6: Consultations
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MCAA Sections (cont’d)
‒ Section 7: Amendments
‒ Section 8: Term of Agreement
‒ Section 9: Coordinating Body Secretariat
‒ Annex to the Agreement: Confidentiality and Data
Safeguards Questionnaire
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MCAA Annex – Confidentiality and Data
Safeguards Questionnaire
‒ Requires response to specific questions in following
areas:
1. Legal Framework for confidentiality / use restrictions
1. Tax Conventions, TIEAs, and other Exchange
Agreements
2. Domestic Legislation
2. Information Security Management
1.
2.
3.
4.
Background Checks and Contracts
Training and Awareness
Departure Policies
[…/…]
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MCAA Annex – Confidentiality and Data
Safeguards Questionnaire (cont’d)
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Physical Security: Access to Premises
Physical Security: Physical Document Storage
Planning
Configuration Management
Access Control
Identification and Authentication
Audit and Accountability
Maintenance
System and Communications Protection
[…/…]
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MCAA Annex – Confidentiality and Data
Safeguards Questionnaire (cont’d)
13.
14.
15.
16.
17.
18.
19.
System and Information Integrity
Security Assessments
Contingency Planning
Risk Assessment
Systems and Services Acquisition
Media Protection
Protection of Treaty-Exchanged data (formerly Prevention
of Data Commingling)
20. Information Disposal Policies
3. Monitoring and Enforcement
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MCAA Annex – Confidentiality and Data
Safeguards Questionnaire (cont’d)
3. Monitoring and Enforcement
3. Penalties and Sanctions
4. Policing Unauthorized Access and Disclosure
5. Sanctions and Prior Experience
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Implementation by US?
We are not convinced that Treasury has the
authority to require CbC reporting by certain
U.S. companies (including sharing the
information with foreign governments).
Senate Finance Chair Orrin Hatch (R-UT) and
W&M Chair Paul Ryan (R-WI)
August 27, 2015
A word of caution for Treasury
-- if you move ahead on CbC,
you’ll get a challenge from us.
Rep. Kevin Brady (R-TX), W&M
September 21, 2015
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Implementation by US?
The Hatch-Ryan letter shows we
have a robust democracy. At
Treasury, we think we have the
authority, and we’re proceeding to
implement it in a timely manner.
Bob Stack, Deputy Assistant Secretary
(International Tax Affairs), US Treasury
September 2, 2015
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Implementation abroad
Country
Date
CbC Event
Australia
September 16, 2015
Release of draft law
Germany
June 2015
Tax reform proposal
Mexico
September 8, 2015
Tax reform proposal
Netherlands
September 15, 2015
Release of draft law
Poland
April 27, 2015
Draft regulation
Spain
July 11, 2015
Royal decree 634/2015
United Kingdom
January 2015
Release of draft law
Etc.
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Related developments to
monitor
Action 13: CbC Reporting — Related
Developments
‒
‒
© 2015 Baker & McKenzie LLP
June 17, 2015: European Commission launches
transparency consultation
July 8, 2015: European Parliament approves public
CbC reporting
‒
July 22, 2015: UK HMRC launches consultation on
proposal for annual publication of tax strategy
‒
August 18, 2015: Australian Senate Economic
References Committee Report recommends that the
government consider publishing excerpts from the
CbC reports
Thank You!
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