Ireland Issues Country-by-Country Reporting Manual

; posted on
May 8th, 2018

The Irish Revenue released a new Tax and Duty Manual on Country-by-Country Reporting (CbCR). The manual responds to some frequently asked questions on the interpretation of the CbCR legislations in Ireland.

Scope of the CbCR Regulations

Being part of Action 13 of the OECD/G20 BEPS project and the EU Commission’s Anti-Tax Avoidance Package, CbC Reporting applies to MNE Groups with consolidated group revenue of €70 Million or more in the immediately preceding fiscal year. An Irish tax resident constituent entity which is ultimate parent entity, surrogate parent entity or designated entity of such an MNE Group is required to file CbC Reports in Ireland with effect from 1 January 2016. Under some circumstances, an Irish tax resident domestic constituent entity which is neither an ultimate parent entity, a surrogate entity nor an EU designated entity of such an MNE Group may be required to file a CbC Report or an Equivalent CbC Report under the secondary reporting mechanism.

What Information to Submit

A CbC Report for an MNE Group must contain the following information in respect to each jurisdiction in which the MNE Group operates:

  • on an aggregate basis,
    • amount of unrelated party revenue, related party revenue and total revenue;
    • amount of profit or loss before income tax,
    • amount of income tax paid;
    • amount of income tax accrued,
    • amount of stated capital,
    • amount of accumulated earnings,
    • number of employees, and
    • value of tangible assets other than cash or cash equivalents; and
       
  • identification and the tax identification number of each constituent entity carrying on a business or tax resident in each jurisdiction and, where different from such jurisdiction of tax residence, the jurisdiction under the laws of which such constituent entity is organised, and the nature of the main business activity or activities of each constituent entity.

An Equivalent CbC Report is a country-by-country report, but only to the extent the information required to be included in that report is within the possession of, or is obtained or acquired by, a domestic constituent entity. Under secondary reporting mechanism, an Irish tax resident domestic constituent entity, whose parent has refused to provide it with all the information required to provide a full CbC report for the MNE Group, is required to include in the CbC Report:

  • all information that is within its possession and
  • all information, in respect of which it has an enforceable legal right to obtain or acquire from other group entities.

Deadline and How to File the CbCR

All notifications must be made no later than the last day of the fiscal year to which the CbC Report/Equivalent CbC Report relates and must be made for each fiscal year. Notifications should be submitted electronically via ROS and follow the Step-by-Step Guide in Appendix III.

If errors are found in a notification already submitted to Revenue via ROS, users can refer Section III of the Step-by-Step Guide to replace the errors.

Other Technical Issues

The Manual also clarifies other technical issues, including:

  • What sources of data should be used to complete the CbC Report / Equivalent CbC Report?
  • Will Revenue seek to reconcile the CbC Report / Equivalent CbC Report to the consolidated accounts of an MNE Group?
  • How should the CbC Reporting rules be applied to investment funds?
  • How should the CbC Report / Equivalent CbC Report be filed?
  • The XML Schema User Guide states that a tax administration may issue guidance for the domestic reporting of CbC Reports.
  • Is there any Irish Revenue guidance that should be followed for any elements within the CbC XML Schema?
  • Are there any character restrictions or combination of characters which should not be included in a CbC Report / Equivalent CbC Report?
  • Is it possible to amend or delete a CbC Report / Equivalent CbC Report after it has been submitted?
  • What character encoding to use when compiling a CbC XML file?
  • When must a CbC Report / Equivalent CbC Report be filed with Revenue?
  • Short/long accounting periods.
  • What happens if the ultimate parent entity of an MNE Group changes during a fiscal year?
  • What penalties apply for the non-filing of a CbC Report / Equivalent CbC Report or when the CbC Report / Equivalent CbC Report is incorrect or incomplete?
  • What notifications are required for CbC Reporting purposes in Ireland?
  • How will Revenue obtain CbC Reports for Irish subsidiaries / permanent establishments of an MNE Group where the reporting entity is not tax resident in Ireland?
  • Will Revenue exchange CbC Reports filed in Ireland with other tax authorities?
  • What conditions must be satisfied before Revenue automatically exchanges CbC Reports with other tax jurisdictions? 37. Will Equivalent CbC Reports be exchanged with other tax authorities?
  • How will Revenue safeguard the confidentiality of information provided on CbC Reports / Equivalent CbC Reports?
  • What will the information provided on a CbC Report / Equivalent CbC Report be used for?

Sources: Irish Tax & Customs, Irish Tax & Duty Manual

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