Following the popular July session, Arkk Solutions partnered with Duff & Phelps to bring Country by Country Reporting filers another insightful webinar. This time we focused on the latest guidance from HMRC, security concerns under the new measurement, and what filers need to know about the OECD templates.

Changing guidance

 

Our recent survey showed that filers are concerned about the lack of clarity on certain definitions for reporting. The measurement has been introduced quickly, and as such less common scenarios are still being considered. There is currently a drip feed from the OECD of clarifications, the latest being reporting options for stateless entities.

HMRC’s latest update confirmed:

– Notification must occur annually to confirm; whether the group intends to file to HMRC or with another jurisdiction, who will be filing the report, which country will receive the report, and the names and unique taxpayer references for all UK businesses

– The country-by-country ID number will be mandatory for filing, and firms can obtain this when they register with HMRC (the registration portal is not yet open)

– The fine for filing an inaccurate report can be up to £3,000

To keep an eye on guidance updates, we recommend joining any CbC groups available to you, and signing up for our next webinar where we’ll cover the latest news from the OECD and HMRC.

Security measures

 

Ever since Country by Country Reporting was first announced, the question of confidentiality for sensitive MNE data became a top priority.

The European Commission are proposing making disclosures public, a decision currently being debated by the European Parliament and not yet reviewed by individual member states.

In the meantime, the OECD is focused on confidentially, ensuring that information is not shared beyond the appropriate security safeguards. In our previous experience, any governments found not following appropriate safeguards will find themselves suspended from future information exchanges.

Best practice is to prepare for potential scenarios which could occur in the six-month information sharing window after the filing deadline. In terms of the XML conversion, Arkk Solutions are ISO 27001 certified and use the same level of security you would expect to see on your online banking.

The Templates

 

We’ve found that some filers are expecting to convert the OECD templates into XML format for submission. Whilst these templates are very useful for working out the definitions of each Table for reporting, they do not cover the full XML schema required to submit successfully. Examples of this include providing the full address of each entity and providing the Tax Identification Number for each jurisdiction.

Arkk’s templates include an import feature which will allow you to transfer your populated OECD templates onto an Excel spreadsheet with the correct XML schema.

Performing a Dry Run

 

Again, we stressed the importance of conducting a dry run when access to the HMRC CBC portal becomes available. This will ensure that your XML submission will be accepted, and will allow you to review any validation errors before the filing deadline.

If you’d like to discuss your Country by Country Reporting requirements in further detail with Arkk Solutions or Duff & Phelps, please get in touch.

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