Treat this as a Strategic Issue in 2016/2017 - The lead time necessary to evaluate and prepare a company’s internal systems and processes for this historic shift in reporting transparency should not be underestimated. In order to mitigate audit and reputational risk, corporate tax departments will need to continually take a proactive approach to CbC reporting. This proactive approach could include a pro-forma preparation and review of the CbC report before filing.
Regardless of other international concerns such as “secondary (reporting) mechanisms” and dissimilar data sources, U.S. MNCs should move onward with CbC reporting provisions, considering that other countries may actually anticipate the U.S. and OECD stated deadlines, and probably require direct filing of CbCR in their jurisdictions by U.S. companies for 2016.
Look for my next post where I will cover the second step.
Please remember that the Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information.
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Bob Norton, Specialist Leader at Deloitte, was formerly Chief Income Tax Officer in the Chief Tax Office (CTO) of Vertex, Inc. Bob has more than 30 years of corporate tax, accounting and technology experience from both public accounting and global industry. Prior to working at Vertex, Bob held several senior financial management positions running global tax, treasury, and merger and acquisition functions for Siemens' Medical IT division. Bob is a noted author and speaker and sits on the Editorial Advisory Board of Financial Executives magazine and is a member of FEI, the Tax Council, AICPA, PICPA, and the Association for Computers and Taxation. He is a CPA and received a B.S. in Accounting from the Pennsylvania State University and an M.S. in Taxation with honors from Villanova University.