Global Tax Reform is Underway: A CbCR US Regulations Refresher

  • February 20, 2017

As global corporate tax reform progresses, discussions continue to intensify about implications for multinational enterprises (MNEs) headquartered in the US. In June 2016, the US Treasury Department and the Internal Revenue Service released final regulations concerning Country-by-Country Reporting (CbCR). The final CbCR regulations are generally consistent with the proposed regulations released by the Treasury in December 2015. An article I wrote summarizing notable changes reflected in the final regulations was recently published in World Finance; some highlights are below.

A theme to revisions shown in the final CbCR regulations is clarification. One term clarified is “Constituent Entities/Persons Required to File” — the final regulations specify that CbCR information is not required for foreign corporations or partnerships if those entities are not mandated to furnish information under Section 6038(a) of the Internal Revenue Code. The final regulations also clarify that US territories and possessions qualify as tax jurisdictions for the purposes of CbCR. Additionally, the reporting period covered by the CbC report was clearly spelled out in the final rules: it is the period of the ultimate parent entity’s applicable annual financial statement that ends with or within the parent entity’s taxable year; if the parent entity does not prepare annual financial statements, the reporting period covered is the 12-month period that ends on the last day of parent entity’s taxable year.

You can read the article here to get a more complete recap of the final US CbCR regulations, and to find out the three questions you should ask in order to assess your tax function’s compliance readiness.

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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Nancy Manzano

Tax Director

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Nancy Manzano is a Director in the Chief Tax Office at Vertex, responsible for insight and thought leadership regarding in-house corporate tax department operations, spanning income, global and transaction tax. A seasoned tax professional, Nancy is a licensed C.P.A., has a B.S. in business administration from Drexel University and an M.S. in taxation from Widener University.

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