The Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) Regulations 2016

EXPLANATORY NOTE

(This note is not part of the Regulations)

The Regulations give effect to the OECD Country-by-Country Reporting guidance set out in “Transfer Pricing Documentation and Country-by-Country Reporting, Action 13: 2015 Final Report” published on 5th October 2015. The document is available on the OECD website at http://www.oecd.org/tax/transfer-pricing-documentation-and-country-by-country-reporting-action-13-2015-final-report-9789264241480-en.htm. The guidance forms part of the wider OECD Base Erosion and Profit Shifting Action Plan (http://www.oecd.org/ctp/BEPSActionPlan.pdf) adopted by the OECD and G20 countries in respect of the provision of information concerning high-level transfer pricing.

Regulation 1 provides for citation and commencement.

Regulation 2 defines terms used in the Regulations including by reference to definitions in the OECD model legislation which is contained in the report published on 5th October 2015.

Regulation 3 sets out requirements for ultimate parent entities in the United Kingdom and entities of multi-national groups with a connection to the United Kingdom to file country-by-country reports or United Kingdom country-by-country reports with Her Majesty’s Revenue and Customs in specified circumstances. It also provides that other entities of multi-national groups may file country-by-country reports where specified conditions are met.

Regulation 4 sets out the threshold which triggers the requirement or ability for entities to file country-by-country reports or United Kingdom country-by-country reports with Her Majesty’s Revenue and Customs.

Regulation 5 sets out the definitions of “United Kingdom country-by-country report” and “United Kingdom entity”.

Regulation 6 sets out circumstances in which United Kingdom entities are required to file United Kingdom country-by-country reports and in which other entities may file country-by-country reports with Her Majesty’s Revenue and Customs.

Regulation 7 requires the Commissioners for Her Majesty’s Revenue and Customs to make specific or general directions regarding the filing of country-by-country reports. By regulation 8, those reports must be filed in accordance with such directions.

Regulation 9 sets out presumptions that will apply in respect of the filing of country-by-country reports.

Regulation 10 identifies the reporting entities which may be directed to provide information under regulation 11. By regulation 11, the Commissioners for Her Majesty’s Revenue and Customs may issue a direction requiring entities to provide information to determine the accuracy of a country-by-country report.

Regulations 12 to 20 make provision for penalties for breaches of obligations imposed by the Regulations including provision for appeals and enforcement.

Regulation 21 is an anti-avoidance provision.

A Tax Information and Impact Note covering this instrument will be published on the government website at http:/www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.