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U.S. releases final CbC reporting regulations

On June 29, 2016, the IRS released its final regulations that require annual country-by-country ('CbC') reporting. These regulations are scheduled to be published in the Federal Register on June 30, 2016.

 

The regulations were originally proposed on December 23, 2015. A public hearing was held during which comments were received and considered, and the proposed regulations were adopted.

 

The final regulations affect a United States entity that is the ultimate parent entity of a multinational enterprise group whose annual revenues are $850 million or greater. The IRS intends that the information collection requirements in the regulations will be satisfied by submitting a new reporting 'Form 8975, CbC report' with an income tax return.

 

The regulations substantially follow the guidance under Action 13 of the Organization of Economic Cooperation and Development ('OECD'). This provides for transfer pricing documentation through a 3-tiered approach that includes country-by-country reporting, a master file and a local file.