Are you ready for Country by Country reporting?

19.9.2017

With the amendment to the International Cooperation Act (which has already passed in both the Chamber of Deputies and the Senate at the time of writing this article), another business obligation has come – the introduction of Country by Country Reporting (CbCR). The automatic exchange of information will be subject to information reported by multinational enterprise groups. The obligation to assemble the CbCR is one of the outputs of the Base Erosion and Profit Shifting Action Plan (“BEPS”).

International groups of companies with annual consolidated revenues of more than EUR 750 million will be required to prepare a CbCR containing the information relevant for assessing the correct allocation of the tax base between the individual countries.

The highest parent entity in the country of its registered office will submit the CbCR on a standardised form.

In the Czech Republic, the format of the report and the instructions for completing it will be determined by the Ministry of Finance decree.

The Czech entity, which is a member of an international group of companies, will be required to file a statement to the Specialised Financial Office identifying the highest parent entity, its state and jurisdiction. We would like to emphasize that, in this case, the first announcement must be made no later than the 31st of October, 2017!

If a Czech entity is the highest parent of a group, it will be obliged to compile a report by country and submit it by means of a “notification”. This notification, which will contain the CbCR, will always have to be submitted within 12 months of the end of the reporting period, i.e., by the 31st of December, 2017, for the period beginning on the 1st of January, 2016.

The introduction of the CbCR is another measure that will provide the Czech financial administration with new information that will be used logically to further pressure on transfer pricing in tax controls.




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