Tax transparency is now a worldwide phenomenon: The Organization for Economic Cooperation and Development (OECD) recently finalized a country-by-country (CbC) reporting template that provides global visibility into company tax matters and poses challenges from data management to reputational risk. The introduction of CbC reporting poses the following challenges:
- Data management challenges to properly prepare the report
- Expected increase in tax controversy
- Increased reputational risk
Given the global visibility into company tax matters the template provides, affected multinational enterprises (MNEs) are well advised to take proactive steps now in preparing for this game-changing new tax disclosure to effectively manage their tax and reputational risks.
To get started, tax departments at MNEs should ask four critical questions.