Country by country reporting (CbCR) is an annual filing obligation for large multinational enterprises (MNEs) under OECD BEPS Action 13. MNE groups with consolidated revenues at or above EUR 750 million must report their income, taxes paid, employees, and assets across every tax jurisdiction in which they operate.
How to Comply with CbCR: Five Key Steps
- Determine whether your MNE group meets the EUR 750 million consolidated revenue threshold.
- Identify the correct filing entity – typically the ultimate parent entity (UPE) of the group.
- Prepare the three-table CbCR template covering financial data, entity activities, and supporting notes.
- File the report with the home country tax authority within the applicable local deadline.
- Confirm that the report will be exchanged with relevant tax authorities through official channels.
What Is Country by Country Reporting?
Country by country reporting (CbCR) is a complementary mechanism within the broader transfer pricing documentation framework. It sits alongside the Master File and Local File as part of the three-tiered approach introduced by the OECD under BEPS Action 13.
The OECD requires MNE groups to report annually for each tax jurisdiction in which they operate. The report covers revenue, profit before income tax, income tax paid and accrued, number of employees, stated capital, retained earnings, and tangible assets.
The objective is to give tax authorities a consolidated, global view of where an MNE earns its profits, where it pays its taxes, and where its economic substance actually sits. That view is then used for transfer pricing and BEPS risk assessment – not for direct tax assessment. CbCR does not, by itself, create a tax liability.
Why Was CbCR Introduced?
CbCR was introduced as part of the OECD/G20 BEPS project. It is one of four BEPS minimum standards, each subject to peer review to verify consistent implementation across jurisdictions.
The scope of adoption has grown significantly since 2016. Over 120 jurisdictions now have CbCR rules in place. More than 4,900 bilateral exchange relationships for CbC reports are now active.
Companies should expect that CbCR data filed with one tax authority will be shared with others. This has made CbCR a central tool for coordinated international tax enforcement.
Who Must File a Country-by-Country Report?
The Ultimate Parent Entity Rule
In general, the ultimate parent entity (UPE) prepares and files its CbC report with the tax administration in its jurisdiction of tax residence. That tax administration automatically exchanges the report with administrations in each jurisdiction where the MNE group has a constituent entity.
The filing obligation applies only to MNE groups that exceed the consolidated revenue threshold. Below that threshold, no CbCR obligation exists under the OECD standard, though some jurisdictions may have introduced additional local requirements.
When Local Filing Applies: Surrogate and Local Entities
Not all groups file solely through the UPE. Where the UPE is not obligated to file in its home jurisdiction, or where no qualifying exchange agreement exists with a country where the group operates, a local filing requirement may be triggered. In such cases, a surrogate parent entity or a local constituent entity may be required to file in that jurisdiction.
CbCR data is treated as confidential. It is shared exclusively through official exchange mechanisms and is not publicly disclosed under the OECD standard.
Who Files the CbC Report? A Decision Guide
What Is the Revenue Threshold for CbCR?
The OECD standard threshold is EUR 750 million in consolidated group revenue. Many jurisdictions apply a local currency equivalent of the EUR 750 million threshold rather than the euro amount itself. This creates a practical risk that is easy to overlook. Exchange rate movements mean that a group’s consolidated revenue may fall below EUR 750 million in euro terms but exceed the local currency equivalent in a specific jurisdiction – or the reverse. A group that assumes it is below the threshold based on the OECD figure alone may still face a filing obligation under local law.
This is not a theoretical concern. Threshold mismatches have real consequences: a missed local filing can trigger penalties, even where the group has no OECD-level obligation. Conversely, a group may be required to file under the OECD standard but exempt under a jurisdiction’s domestic rules.
Always verify the applicable threshold in each relevant jurisdiction before concluding that no obligation exists. Local legislation governs, and it does not always mirror the OECD standard precisely.
What Does the CbCR Template Include?
The CbCR template is structured around three tables. Together, they give tax authorities a layered picture of the group’s global operations.
Table 1 – Jurisdiction-Level Financial Data
Table 1 provides a breakdown by tax jurisdiction – not by individual entity. For each jurisdiction, the report includes revenues, profit before income tax, income tax paid and accrued, number of employees, stated capital, retained earnings, and tangible assets. This data is used for high-level transfer pricing risk assessment.
Table 2 – Entity List and Business Activities
Table 2 identifies each constituent entity within the group and its jurisdiction of tax residence. It also indicates the primary business activities each entity performs. This helps tax authorities assess whether reported profits align with actual economic substance.
Table 3 – Supporting Information and Methodologies
Table 3 provides explanatory context for Tables 1 and 2. It covers the methodologies used in preparing the reported figures. It also confirms consistency between the CbCR data and the Master File and Local File. Any material departures or country-specific adjustments should be flagged here.
How Are CbC Reports Shared and Kept Confidential?
Under the OECD standard, CbCR data is confidential. Reports are shared between tax authorities through official exchange channels, including multilateral and bilateral competent authority agreements. They are not published or accessible to the public.
The confidential treatment of CbCR data is itself subject to OECD peer review. Jurisdictions must demonstrate that they have adequate safeguards in place to protect the data and restrict its use to appropriate purposes.
That said, confidentiality is not universal. Under Directive (EU) 2021/2101, EU member states have transposed public CbCR rules into national law. For in-scope MNE groups, compliance is mandatory, not optional. First public disclosures are expected by 31 December 2026.
This is still a developing area. Implementation details continue to evolve at the member state level. Groups with EU operations should monitor local developments closely.
Key Takeaways
- CbCR is one of four BEPS minimum standards under OECD BEPS Action 13, now adopted by more than 120 jurisdictions.
- The standard revenue threshold is EUR 750 million in consolidated group revenue. Local currency equivalents may differ due to exchange rate movements – always verify the applicable local threshold.
- The filing obligation normally rests with the ultimate parent entity. Local and surrogate filing rules apply in specific circumstances.
- The CbCR template contains three tables: jurisdiction-level financial data, entity and activity lists, and supporting methodological notes.
- CbCR is a risk-assessment tool for tax authorities – not a mechanism for direct tax assessment.
- Under the OECD standard, CbCR data is confidential. EU Public CbCR introduces a mandatory public disclosure obligation for in-scope groups, with first disclosures expected by 31 December 2026.
Conclusion
Country by country reporting is now a permanent feature of the international tax landscape. For any MNE group at or near the EUR 750 million threshold, understanding the filing structure, the three-table template, and the distinction between private OECD reporting and the new EU public disclosure rules is essential. Getting this right is not only a compliance matter – it directly shapes how tax authorities around the world perceive your group’s transfer pricing profile.
If you are assessing your CbCR obligations for the first time, reviewing a prior filing, or preparing for the EU public disclosure requirements, specialist advice can make a significant difference. Contact TPTAX to discuss your CbCR position and how it fits within your broader transfer pricing documentation strategy.
Frequently Asked Questions
What is country by country reporting?
Country by country reporting (CbCR) is an annual filing requirement for large MNEs under OECD BEPS Action 13. It requires groups to report income, taxes, employees, and assets by tax jurisdiction.
Who is required to file a country by country report?
The ultimate parent entity of an MNE group is typically responsible for filing. A surrogate parent or local entity may file where the UPE has no obligation or no exchange agreement exists.
What is the CbCR revenue threshold?
The OECD standard threshold is EUR 750 million in consolidated group revenue. Many jurisdictions apply a local currency equivalent, which can differ from the euro amount due to exchange rate movements. Always verify the applicable local threshold.
Is CbCR data publicly available?
Under the OECD standard, CbCR data is confidential and shared only between tax authorities. EU Public CbCR introduces a mandatory public disclosure obligation for in-scope MNE groups, with first disclosures expected by 31 December 2026.
How does CbCR relate to transfer pricing?
CbCR forms part of the three-tiered transfer pricing documentation framework, alongside the Master File and Local File. Tax authorities use CbCR data primarily for high-level transfer pricing and BEPS risk assessment.
