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News About Country-by-Country Reporting
On July 10, 2017 we summarized in the article “Transfer pricing documentation and country-by-country reporting” the provisions related the so called ‘CbC Report’ which contains certain information relating to the global allocation of the Multinational Enterprises group’s income and taxes paid together with certain indicators of the location of economic activity within the MNE group.
This time, we would like to update the time table related to this new transfer pricing documentation on the basis of the specific operating regulation which has been just approved by Italian Tax Office dated November 28, 2017 and December 12, 2017.
As anticipated, the CbCR has been introduced in Italy by Law n. 208 on December 28, 2015, effective from January 1, 2016. The first specific operating regulation, approved by Ministerial Decree dated February 23, 2017, clarified who, when and how the CbCR is required.
The regulation approved on November 28, 2017 describes in detail the object of the report, the data, the language (Italian and English) and the currency which can be used to fill in the blanks. Further it explains the operative way to transmit it to the Italian Tax Authorities and specifies that:
- the entity of MNE Groups, resident in Italy, required to provide the CbCR, as Ultimate Parent Company or the Surrogate Parent Entity or Constituent Entity designed within the Group, shall inform the Italian Tax Authorities about the existence of their obligation to fill in the CbCR,
by the deadline for filling in the Italian tax return related to the reporting fiscal year (within the last day of the ninth month following the FY’s end);
- in principle, the CbCR shall be provided to the Italian Tax Authorities within 12 months following the last day of the reporting FY;
- for the first application year, the entity (required to provide the CbCR) of MNE Groups with the FY starting January 1, 2016 or after and which ends before December 31, 2016, shall provide the CbCR within December 31, 2017.
With the regulation approved on December 12, 2017 it has been decided that the previous deadline (December 31, 2017) provided for the first application year to entities (required to provide the CbCR) of MNE Groups with the FY starting January 1, 2016 or after and which ends before December 31, 2016, has been postponed to February 9, 2018.
Maurizio Bottoni is the senior partner of Interconsulting. As a consultant in one of the Big Four he has developed a deep knowledge of the Italian and International tax law, through the involvement in operations and reorganization of multinationals. Extraordinary transactions and international issues are his daily business.