Yesterday, the OECD issued its OECD’s annual Corporate Tax Statistics publication comprising new aggregated information on the global tax and economic activities of nearly 4,000 multinational enterprise (MNE) groups. The information is based on the CbC Reporting requirements for MNEs under the OECD/G20 BEPS Project.
CbC Reporting is used by tax authorities for assessment on the (mis)alignment of economic value created by MNEs’ activities with locally reported profits.
A preliminary assessment of the new statistics suggests the following:
· There is a misalignment between the location where profits are reported and the location where economic activities occur.
· Revenues per employee tend to be higher where statutory CIT rates are zero and in investment hubs.
· On average, the share of related party revenues in total revenues is higher for MNEs in investment hubs.
· The composition of business activity differs across jurisdiction groups, with the predominant business activity in investment hubs being “holding shares and other equity instruments”.
Caius can help you providing insight in your CbC Reporting and proactively address issues from a risk and BOD perspective.