Today, the IRS and Treasury Department issued proposed regulations implementing annual country-by-country reporting requirements for US persons that are the ultimate parent entity of a multinational enterprise group that has annual revenue for the preceding annual accounting period of $850 million or more.
The categories of information required to be reported on the US report were developed in coordination with other member countries of the Group of Twenty (G20) and the Organization for Economic Cooperation and Development (OECD) and use the model template produced by the OECD as part of its base erosion and profits shifting (BEPS) project. The IRS and Treasury state that while the proposed regulations generally seek to minimize deviations from the model template, the proposed regulations also are intended to be tailored to be consistent with the preexisting information reporting requirements applicable to US persons under sections 6001, 6011, 6012, 6031, and 6038 and to reduce the compliance burdens imposed by the additional reporting.
The preamble to the proposed regulations states that the information in the report will not be used as a substitute for an appropriate transfer pricing determination based on a best method analysis but may be used as the basis for making further inquiries into transfer pricing practices or other tax matters.
The proposed regulations provide a template on which the form used for reporting will be based.