US Clarifies Instructions For Country-By-Country Report Forms

; posted on
July 27th, 2018

The US Internal Revenue Service clarified several issues regarding Instructions for Schedule A (Form 8975), the country by country report file.

Fiscally Transparent Entities

Under US domestic legislation, certain U.S. MNE groups may have only U.S.-organized constituent entities that are fiscally transparent. These fiscally transparent U.S. business entities do not have a tax jurisdiction of residence for purposes of reporting information on Form 8975. Thus, these fiscally transparent U.S. business entities, along with all other constituent entities of the U.S. MNE group that do not have a tax jurisdiction of residence, should be reported on one Schedule A that indicates the tax jurisdiction “stateless” by entering code “X5” on the tax jurisdiction line of Part I, Schedule A. The U.S. MNE’s fiscally transparent U.S. business entities should be listed in Part II of this Schedule A. Each U.S.-organized constituent entity is therefore listed on either a United States Schedule A or on a “stateless” Schedule A. If a filing does not have either a United States Schedule A or a “stateless” Schedule A that contains fiscally transparent U.S. business entities, then the Form 8975 has not been completed properly.

Background: Form 8975 and Schedule A (Form 8975)

Certain United States persons that are the ultimate parent entity of a United States multinational enterprise (U.S. MNE) group with annual revenue for the preceding reporting period of $850 million or more are required to file Form 8975. Form 8975 and Schedules A (Form 8975) are used by filers to annually report certain information with respect to the filer’s U.S. MNE group on a country-by-country basis. To be noted, file Form 8975 and its Schedules A (Form 8975) may not be filed separately from the filer’s income tax return.

Sources: IRS

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