The Inclusive Framework on
BEPS releases additional guidance to give certainty to tax administrations and
MNE Groups on the implementation of Country-by-Country (CbC) Reporting under
BEPS Action 13; Additional guidance addresses 2 specific issues – a) definition
of total consolidated group revenue and b) whether non-compliance with the
confidentiality, appropriate use and consistency conditions constitutes
systemic failure; On the first issue, OECD Guidance clarifies that if an MNE
Group which does not have equity interests traded on a public securities
exchange use consolidated financial statements based on accounting
principles/standards different from those that are used to determine the
existence of and membership of a group under Article 1.1 of the Model
Legislation, then such MNE Group will still be required to calculate 'total
consolidated group revenue’ for the purposes of Article 1.3 based on the
accounting standards to be used for identifying a group under Article 1.1.;
On the second issue, OECD Guidance states that if a jurisdiction does not
in practice meet the conditions of confidentiality, appropriate use or
consistency, a Competent Authority may temporarily suspend the exchange of
information by giving notice in writing if it is determined that there is or
there has been significant non-compliance by the other Competent Authority;
However, noting that consequences of non-compliance with conditions of
confidentiality, consistency and appropriate use will depend on the terms of
the Qualifying Competent Authority Agreement (QCAA) between the jurisdictions,
OECD Guidance clarifies that “Because a temporary suspension of exchange of
information under Section 8 is in accordance with the terms of the relevant
QCAA, this does not constitute Systemic Failure”; Separately, OECD also
releases compilation of approaches adopted by member jurisdictions of the
Inclusive Framework with respect to issues where the guidance allows for
alternative approaches
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