Tuesday, September 7, 2021

The U.S. Will Start to Automatically Receive CbC Reports From France & Germany

On August 25, 2021, the Competent Authorities of France and Germany agreed to automatically exchange country-by-country reports with the U.S.

According to the statements released by the Competent Authority of the U.S., French, German, and U.S. laws require multinational enterprise (MNE) groups to annually file a CbC report that conforms to the requirements of Action 13 of the Organization for Economic Cooperation and Development (OECD)/G20 Action Plan on Base Erosion and Profit Shifting (BEPS).

U.S. MNE groups must annually file Form 8975, Country-by-Country Report, with the income tax return of the ultimate parent entity to comply with this requirement. 

The Competent Authorities of The U.S. and France Are Negotiating Agreements To Allow For The Automatic Exchange of CbC Reports Between The U.S. And France and so are
The Competent Authorities of the U.S. and Germany.

Instead of waiting for these negotiations to conclude:

  • The Competent Authorities of the U.S. and France have agreed to automatically exchange the CbC reports MNE groups file for fiscal years beginning in calendar 2021. The CbC reports will automatically be exchanged as soon possible after they are received and no later than 15 months after the last day of the fiscal year of the MNE group to which the report relates.

  • The Competent Authorities of the U.S. and Germany have agreed to automatically exchange the CbC reports MNE groups file for fiscal years beginning in calendar 2020. The CbC reports will automatically be exchanged as soon possible after they are received and no later than 15 months after the last day of the fiscal year of the MNE group to which the report relates.

The Competent Authorities of France and Germany also intend to notify the U.S. when they perceive an error in a CbC report that may have led to incorrect or incomplete information reporting in the U.S. Similarly, the U.S. Competent Authority intends to notify its counterparts in Germany and France when it perceives an error in a CbC report that may have led to incorrect or incomplete information reporting in those countries. 

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