prop · H40347 · 2016-12-06 00:00:00 — where appropriate, the wording has been complemented or amended to reflect the Guidance on Country-by-Country Reporting set out in Chapter v of these Guidelines. As a next step, it is intended that an xML Schema and a related User Guide will be developed with a view to accommodating the electronic exchange of Country-by-Country Reports. TRANSFER PRICING DOCUMENTATION AND COUNTRY-BY-COUNTRY REPORTING © 2015 ANNEx Iv TO ChAPTER v. COUNTRY-BY-COUNTRY REPORTING IMPLEMENTATION PACKAGE – 39 Model legislation related to Country-by-Country Reporting For purposes of this [title of the law] the following terms have the following meanings: 1.The term “Group” means a collection of enterprises related through ownership or control such that it is either required to prepare Consolidated Financial Statements for financial reporting purposes under applicable accounting principles or would be so required if equity interests in any of the enterprises were traded on a public securities exchange. 2.The term “” means any Group that (i) includes two or more enterprises the tax for which is in different jurisdictions, or includes an enterprise that is resident for tax purposes in one jurisdiction and is subject to tax with respect to the business carried out through a permanent in another jurisdiction, and (ii) is not an . 3.The term “” means, with respect to any Fiscal Year of the Group, a Group having total consolidated group revenue of less than []/ [insert an amount in local currency approximately equivalent to as of January 2015] during the Fiscal Year immediately preceding the Reporting Fiscal Year as reflected in its Consolidated Financial Statements for such preceding Fiscal Year. 4.The term “Constituent Entity” means (i) any separate business unit of an that is included in the Consolidated Financial Statements of the for financial reporting purposes, or would be so included if equity interests in such business unit of an were traded on a public securities exchange; (ii) any such business unit that is excluded from the ’s Consolidated Financial Statements solely on size or materiality grounds; and (iii) any permanent of any separate business unit of the MNE Group included in (i) or (ii) above provided the business unit prepares a separate financial statement for such permanent for financial reporting, regulatory, tax reporting, or internal management control purposes. 5.The term “Reporting Entity” means the Constituent Entity that is required to file a country-by-report conforming to the requirements in Article 4 in its jurisdiction of tax on behalf of the . The Reporting Entity may be the Ultimate Parent Entity, the Surrogate Parent Entity, or any entity described in paragraph 2 of Article 2. 6.The term “Ultimate Parent Entity” means a Constituent Entity of an that meets the following criteria: (i)it owns directly or indirectly a sufficient interest in one or more other Constituent Entities of such such that it is required to prepare Consolidated Financial Statements under accounting principles generally applied in its jurisdiction of tax , or would be so required if its equity interests were traded on a public securities exchange in its jurisdiction of tax ; and TRANSFER PRICING DOCUMENTATION AND COUNTRY-BY-COUNTRY REPORTING © 2015 40 – ANNEx Iv TO ChAPTER v. COUNTRY-BY-COUNTRY REPORTING IMPLEMENTATION PACKAGE (ii)there is no other Constituent Entity of such that owns directly or indirectly an interest described in subsection (i) above in the first mentioned Constituent Entity. 7.The term “Surrogate Parent Entity” means one Constituent Entity of the that has been appointed by such , as a sole substitute for the Ultimate Parent Entity, to file the Country-by-Country Report in that Constituent Entity’s jurisdiction of tax , on behalf of such , when one or more of the conditions set out in subsection (ii) of paragraph 2 of Article 2 applies. 8.The term “Fiscal Year” means an annual accounting period with respect to which the Ultimate Parent Entity of the prepares its financial statements. 9.The term “Reporting Fiscal Year” means that Fiscal Year the financial and operational results of which are reflected in the Country-by-Country Report defined in Article 4. 10.The term “Qualifying Competent Authority Agreement” means an agreement (i) that is between authorised representatives of those jurisdictions that are parties to an International Agreement and (ii) that requires the automatic exchange of Country-by- Country Reports between the party jurisdictions. 11.The term “International Agreement” shall mean the Multilateral Convention for Mutual Administrative Assistance in Tax Matters, any bilateral or multilateral Tax Convention, or any Agreement to which [Country] is a party, and that by its terms provides legal authority for the exchange of tax information between jurisdictions, including automatic exchange of such information. 12.The term “Consolidated Financial Statements” means the financial statements of an in which the assets, liabilities, income, expenses and cash flows of the Ultimate Parent Entity and the Constituent Entities are presented as those of a single economic entity. 13.The term “Systemic Failure” with respect to a jurisdiction means that a jurisdiction has a Qualifying Competent Authority Agreement in effect with [Country], but has suspended automatic exchange (for reasons other than those that are in accordance with the terms of that Agreement) or otherwise persistently failed to automatically provide to [Country] Country-by-Country Reports in its possession of that have Constituent Entities in [Country]. 1.Each Ultimate Parent Entity of an that is resident for tax purposes in [Country] shall file a Country-by-Country Report conforming to the requirements of Article 4 with the [] with respect to its Reporting Fiscal Year on or before the date specified in Article 5. 2.A Constituent Entity which is not the Ultimate Parent Entity of an shall file a Country-by-Country Report conforming to the requirements of Article 4 with the [] with respect to the Reporting Fiscal Year of an of which it is a Constituent Entity, on or before the date specified in Article 5, if the following criteria are satisfied: (i)the entity is resident for tax purposes in [Country]; and TRANSFER PRICING DOCUMENTATION AND COUNTRY-BY-COUNTRY REPORTING © 2015 ANNEx Iv TO ChAPTER v. COUNTRY-BY-COUNTRY REPORTING IMPLEMENTATION PACKAGE – 41 (ii)one of the following conditions applies: a)the Ultimate Parent Entity of the is not obligated to file a Country-by-Country Report in its jurisdiction of tax ; or, b)the jurisdiction in which the Ultimate Parent Entity is resident for tax purposes has a current International Agreement to which [Country] is a party but does not have a Qualifying Competent Authority Agreement in effect to which [Country] is a party by the time specified in Article 5 for filing the Country-by-Country Report for the Reporting Fiscal Year; or, c)there has been a Systemic Failure of the jurisdiction of tax of the Ultimate Parent Entity that has been notified by the [] to the Constituent Entity resident for tax purposes in [Country]. where there are more than one Constituent Entities of the same that are resident for tax purposes in [Country] and one or more of the conditions set out in subsection (ii) above apply, the may designate one of such Constituent Entities to file the Country-by-Country Report conforming to the requirements of Article 4 with [] with respect to any Reporting Fiscal Year on or before the date specified in Article 5 and to notify the [] that the filing is intended to satisfy the filing requirement of all the Constituent Entities of such that are resident for tax purposes in [Country]. Notwithstanding the provisions of paragraph 2 of this Article 2, when one or more of the conditions set out in subsection (ii) of paragraph 2 of Article 2 apply, an entity described in paragraph 2 of this Article 2 shall not be required to file a Country-by- Country Report with [] with respect to any Reporting Fiscal Year if the of which it is a Constituent Entity has made available a Country- by-Country Report conforming to the requirements of Article 4 with respect to such Fiscal Year through a Surrogate Parent Entity that files that Country-by-Country Report with the tax authority of its jurisdiction of tax on or before the date specified in Article 5 and that satisfies the following conditions: a)the jurisdiction of tax of the Surrogate Parent Entity requires filing of Country-by-Country Reports conforming to the requirements of Article 4; b)the jurisdiction of tax of the Surrogate Parent Entity has a Qualifying Competent Authority Agreement in effect to which [Country] is a party by the time specified in Article 5 for filing the Country-by-Country Report for the Reporting Fiscal Year; c)the jurisdiction of tax of the Surrogate Parent Entity has not notified the [] of a Systemic Failure; d)the jurisdiction of tax of the Surrogate Parent Entity has been notified in accordance with paragraph 1 of Article 3 by the Constituent Entity resident for tax purposes in its jurisdiction that it is the Surrogate Parent Entity; and e)a notification has been provided to [] in accordance with paragraph 2 of Article 3. TRANSFER PRICING DOCUMENTATION AND COUNTRY-BY-COUNTRY REPORTING © 2015 42 – ANNEx Iv TO ChAPTER v. COUNTRY-BY-COUNTRY REPORTING IMPLEMENTATION PACKAGE 1.Any Constituent Entity of an that is resident for tax purposes in [Country] shall notify the [] whether it is the Ultimate Parent Entity or the Surrogate Parent Entity, no later than [the last day of the Reporting Fiscal Year of such ]. 2.where a Constituent Entity of an that is resident for tax purposes in [Country] is not the Ultimate Parent Entity nor the Surrogate Parent Entity, it shall notify the [] of the identity and tax of the Reporting Entity, no later than [the last day of the Reporting Fiscal Year of such ]. 1.For purposes of this [title of the law], a Country-by-Country Report with respect to an is a report containing: (i)Aggregate information relating to the amount of revenue, profit (loss) before income tax, income tax paid, income tax accrued, stated capital, accumulated earnings, number of employees, and tangible assets other than cash or cash equivalents with regard to each jurisdiction in which the operates; (ii)An identification of each Constituent Entity of the setting out the jurisdiction of tax of such Constituent Entity, and where different from such jurisdiction of tax , the jurisdiction under the laws of which such Constituent Entity is organised, and the nature of the main business activity or activities of such Constituent Entity. 2.The Country-by-Country Report shall be filed in a form identical to and applying the definitions and instructions contained in the standard template set out at [of Chapter v of the Transfer Pricing Guidelines as the same may be modified from time to time] / [of the Report Transfer Pricing Documentation and Country-by- Country Reporting on Action 13 of the /G20 Action Plan on Base Erosion and Profit Shifting] / [the Appendix to this law]. Article 5 Time for filing The Country-by-Country Report required by this [title of the law] shall be filed no later than 12 months after the last day of the Reporting Fiscal Year of the . Use and Confidentiality of Country-by-Country Report Information The [] shall use the Country-by-Country Report for purposes of assessing high-level transfer pricing risks and other base erosion and profit shifting related risks in [Country], including assessing the risk of non-compliance by members of the with applicable transfer pricing rules, and where appropriate for economic and statistical analysis. Transfer pricing adjustments by the [] will not be based on the CbC Report. TRANSFER PRICING DOCUMENTATION AND COUNTRY-BY-COUNTRY REPORTING © 2015 ANNEx Iv TO ChAPTER v. COUNTRY-BY-COUNTRY REPORTING IMPLEMENTATION PACKAGE – 43 The [] shall preserve the confidentiality of the information contained in the Country-by-Country Report at least to the same extent that would apply if such information were provided to it under the provisions of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. This model legislation does not include provisions regarding penalties to be imposed in the event a Reporting Entity fails to comply with the reporting requirements for the Country-by-Country Report. It is assumed that jurisdictions would wish to extend their existing transfer pricing documentation penalty regime to the requirements to file the Country-by-Country Report. This [title of the law] is effective for Reporting Fiscal Years of beginning on or after [1 January 2016]. TRANSFER PRICING DOCUMENTATION AND COUNTRY-BY-COUNTRY REPORTING © 2015 ANNEx Iv TO ChAPTER v. COUNTRY-BY-COUNTRY REPORTING IMPLEMENTATION PACKAGE – 45 Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports whereas, the jurisdictions of the signatories to the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports (the “Agreement”) are Parties of, or territories covered by, the Convention on Mutual Administrative Assistance in Tax Matters or the Convention on Mutual Administrative Assistance in Tax Matters as amended by the Protocol (the “Convention”) or have signed or expressed their intention to sign the Convention and acknowledge that the Convention must be in force and in effect in relation to them before the automatic exchange of country-by-country (CbC) reports takes place; whereas, a country that has signed or expressed its intention to sign the Convention will only become a Jurisdiction as defined in Section 1 of this Agreement once it has become a Party to the Convention; whereas, the jurisdictions to increase international tax transparency and improve access of their respective tax authorities to information regarding the global allocation of the income, the taxes paid, and certain indicators of the location of economic activity among tax jurisdictions in which () Groups operate through the automatic exchange of annual CbC Reports, with a view to assessing high-level transfer pricing risks and other base erosion and profit shifting related risks, as well as for economic and statistical analysis, where appropriate; whereas, the laws of the respective Jurisdictions require or are expected to require the Reporting Entity of an to annually file a CbC Report; whereas, the CbC Report is intended to be part of a three-tiered structure, along with a global file and a local file, which together represent a standardised approach to transfer pricing documentation which will provide tax administrations with relevant and reliable information to perform an efficient and robust transfer pricing risk assessment analysis; whereas, Chapter III of the Convention authorises the exchange of information for tax purposes, including the exchange of information on an automatic basis, and allows the competent authorities of the Jurisdictions to agree on the scope and modalities of such automatic exchanges; whereas, Article 6 of the Convention provides that two or more Parties can mutually agree to exchange information automatically, albeit that the actual exchange of the information will take place on a bilateral basis between the ; whereas, the Jurisdictions will have, or are expected to have, in place by the time the first exchange of CbC Reports takes place, (i) appropriate safeguards to ensure that the information received pursuant to this Agreement remains confidential and is used for the purposes of assessing high-level transfer pricing risks and other base erosion and profit shifting related risks, as well as for economic and statistical analysis, where appropriate, in accordance with Section 5 of this Agreement, (ii) the infrastructure for an effective exchange relationship (including established processes for ensuring timely, accurate, and TRANSFER PRICING DOCUMENTATION AND COUNTRY-BY-COUNTRY REPORTING © 2015 46 – ANNEx Iv TO ChAPTER v. COUNTRY-BY-COUNTRY REPORTING IMPLEMENTATION PACKAGE confidential information exchanges, effective and reliable communications, and capabilities to promptly resolve questions and concerns about exchanges or requests for exchanges and to administer the provisions of Section 4 of this Agreement) and (iii) the necessary legislation to require Reporting Entities to file the CbC Report; whereas, the Jurisdictions are committed to discuss with the aim of resolving cases of undesirable economic outcomes, including for individual businesses, in accordance with paragraph 2 of Article 24 of the Convention, as well as paragraph 1 of Section 6 of this Agreement; whereas, mutual agreement procedures, for instance on the basis of a double tax convention concluded between the jurisdictions of the , remain applicable in cases where the CbC Report has been exchanged on the basis of this Agreement; whereas, the of the jurisdictions intend to conclude this Agreement, without prejudice to national legislative procedures (if any), and subject to the confidentiality and other protections provided for in the Convention, including the provisions limiting the use of the information exchanged thereunder; Now, therefore, the have agreed as follows: For the purposes of this Agreement, the following terms have the following meanings: a)the term “Jurisdiction” means a country or a territory in respect of which the Convention is in force and is in effect, either through ratification, acceptance or approval in accordance with Article 28, or through territorial extension in accordance with Article 29, and which is a signatory to this Agreement; b)the term “Competent Authority” means, for each respective Jurisdiction, the persons and authorities listed in of the Convention; c)The term “Group” means a collection of enterprises related through ownership or control such that it is either required to prepare consolidated financial statements for financial reporting purposes under applicable accounting principles or would be so required if equity interests in any of the enterprises were traded on a public securities exchange; d)the term “() Group” means any Group that (i)includes two or more enterprises the tax for which is in different jurisdictions, or includes an enterprise that is resident for tax purposes in one jurisdiction and is subject to tax with respect to the business carried out through a permanent in another jurisdiction, and (ii) is not an ; e)the term “” means a Group that is not required to file a CbC Report on the basis that the annual consolidated group revenue of the Group during the fiscal year immediately preceding the reporting fiscal year, as reflected in its consolidated financial statements for such preceding fiscal year, is below the threshold defined in domestic law by the Jurisdiction and being consistent with the 2015 Report, as may be amended following the 2020 review contemplated therein; TRANSFER PRICING DOCUMENTATION AND COUNTRY-BY-COUNTRY REPORTING © 2015 ANNEx Iv TO ChAPTER v. COUNTRY-BY-COUNTRY REPORTING IMPLEMENTATION PACKAGE – 47 f)the term “Constituent Entity” means (i) any separate business unit of an that is included in the consolidated financial statements for financial reporting purposes, or would be so included if equity interests in such business unit of an were traded on a public securities exchange, (ii) any separate business unit that is excluded from the ’s consolidated financial statements solely on size or materiality grounds and (iii) any permanent of any separate business unit of the MNE Group included in (i) or (ii)above provided the business unit prepares a separate financial statement for such permanent for financial reporting, regulatory, tax reporting or internal management control purposes; g)the term “Reporting Entity” means the Constituent Entity that, by virtue of domestic law in its jurisdiction of tax , files the CbC Report in its capacity to do so on behalf of the ; h)the term “CbC Report” means the Country-by-Country Report to be filed annually by the Reporting Entity in accordance with the laws of its jurisdiction of tax and with the information required to be reported under such laws covering the items and reflecting the format set out in the 2015 Report, as may be amended following the 2020 review contemplated therein; i)the term “2015 Report” means the consolidated report, entitled Transfer Pricing Documentation and Country-by-Country Reporting, on Action 13 of the / G20 Action Plan on Base Erosion and Profit Shifting; j)the term “Co-ordinating Body” means the co-ordinating body of the Convention that, pursuant to paragraph 3 of Article 24 of the Convention, is composed of representatives of the competent authorities of the Parties to the Convention; k)the term “Co-ordinating Body Secretariat” means the Secretariat that, pursuant to paragraph 3 of Article 24 of the Convention, provides support to the Co-ordinating Body; l)the term “Agreement in effect” means, in respect of any two , that both have indicated their intention to automatically exchange information with each other and have satisfied the other conditions set out in paragraph 2 of Section 8. A list of between which this Agreement is in effect is to be published on the website. 2.As regards the application of this Agreement at any time by a Competent Authority of a Jurisdiction, any term not otherwise defined in this Agreement will, unless the context otherwise requires or the agree to a common meaning (as permitted by domestic law), have the meaning that it has at that time under the law of the Jurisdiction applying this Agreement, any meaning under the applicable tax laws of that Jurisdiction prevailing over a meaning given to the term under other laws of that Jurisdiction. Exchange of Information with Respect to Pursuant to the provisions of Articles 6, 21 and 22 of the Convention, each Competent Authority will annually exchange on an automatic basis the CbC Report received from each Reporting Entity that is resident for tax purposes in its jurisdiction with all such other with respect to which it has this Agreement in effect, and in which, on the basis of the information in the CbC Report, one TRANSFER PRICING DOCUMENTATION AND COUNTRY-BY-COUNTRY REPORTING © 2015 48 – ANNEx Iv TO ChAPTER v. COUNTRY-BY-COUNTRY REPORTING IMPLEMENTATION PACKAGE or more Constituent Entities of the of the Reporting Entity are either resident for tax purposes, or are subject to tax with respect to the business carried out through a permanent . Notwithstanding the previous paragraph, the of the Jurisdictions that have indicated that they are to be listed as non-reciprocal jurisdictions on the basis of their notification pursuant to paragraph 1 b) of Section 8 will send CbC Reports pursuant to paragraph 1, but will not receive CbC Reports under this Agreement. that are not listed as non-reciprocal Jurisdictions will both send and receive the information specified in paragraph 1. will, however, not send such information to of the Jurisdictions included in the aforementioned list of non-reciprocal Jurisdictions. Time and of Exchange of Information 1.For the purposes of the exchange of information in Section 2, the currency of the amounts contained in the CbC Report will be specified. 2.with respect to paragraph 1 of Section 2, a CbC Report is first to be exchanged, with respect to the fiscal year of the MNE Group commencing on or after the date indicated by the Competent Authority in the notification pursuant to paragraph 1a) of Section 8, as soon as possible and no later than 18 months after the last day of that fiscal year.