Overview of UK CBCR: background and requirement


published on 12 August 2021 | reading time approx. 3 minutes


Country-by-country reporting (OECD origins)

What is country-by-country reporting?

Country-by-country (CbC) reporting essentially requires large multinational enterprises (MNEs) to provide an annual return that breaks down the key elements of their activities among the jurisdictions in which they operate.



The role of the Organisation for Economic Co-operation and Development (OECD)

MNEs are under increasing pressure to operate in a fair and transparent way, with particular regard to the payment of taxes. Meanwhile, governments across the globe are under pressure to tackle international tax avoidance. In response to these issues, the OECD has developed a range of proposals as part of the wider base erosion and profit shifting (BEPS) project. The final package of recommendations was published by the OECD on 5 October 2015.

CbC reporting is one of the areas covered by these proposals and the detailed recommendations are set out in the final report on Action 13: Transfer Pricing Documentation and Country-by-Country Reporting.
Certain MNEs are required to provide the relevant tax authorities with a report containing high-level details of the following:

  • territories in which they have carried out economic activity
  • revenue and profits generated
  • the amount of tax paid

The OECD has developed a model CbC reporting template which is included in the final report on Action 13.


UK country-by-country reporting

Exchange of CbC reports

The UK is a signatory to the Multilateral Competent Authority Agreement (MCAA) on the exchange of CbC reports. The MCAA is a multilateral framework agreement which specifies the details of what information will be exchanged and when. Where states cannot yet rely on the MCAA, they may be able to exchange information under an existing double tax treaty or tax information exchange agreement.


HMRC has committed to exchange reports within 15 months of the end of the period covered by the report (extended to 18 months for the first period). It will not inform businesses of when actual exchanges are taking place.


The UK legislation

The UK Government announced in September 2014 that it would be the first country to formally commit to implementing the OECD’s model CbC reporting template. Since then, the obligation to file a CbC report in the UK has been introduced in two phases. The first phase saw the introduction of enabling provisions by FA 2015, s 122, which gave the Treasury powers to implement the OECD’s CbC reporting recommendations in the future.
The second phase involved the introduction of The Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) Regulations 2016, SI 2016/237 (referred to in this guidance note as ‘the Regulations’). The Regulations have effect from 18 March 2016 and set out the scope and detail of the obligation to file a CbC report in the UK.

These Regulations have been amended by The Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) (Amendment) Regulations 2017, which came into force on 20 April 2017.


UK Public CbC reporting

There is no UK requirement for CbC reports to be made publicly available. However, FA 2016, Sch 19, para 17 contains enabling provisions which give the Treasury powers to issue regulations requiring groups to publish CbC reporting information in the future.

HMRC has confirmed that UK CbC reports will be used within the risk assessment process for cross-border transactions, mainly between members of a multinational group.


Public CbCR: Disclosure of tax-relevant data in the EU

After 5 years of discussion, representatives of the EU states and the European Parliament agreed on a directive on public Country-by-Country Reporting on 1 June 2021. The negotiating team of the European Parliament has now reached a preliminary political agreement to further increase tax transparency to make it more difficult for multinational groups to shift profits.


Content of the Directive on the Disclosure of Country-by-Country Reporting

The directive affects groups operating in the EU with a consolidated turnover of at least 750 million euros per fiscal year. The contents of the Country-by-Country Reporting (CbCR), including sales, the number of employees, the amount of taxes paid and the distributed profits, are to be publicly accessible in the future. The CbCR only includes aggregated information on group companies that are either domiciled in an EU member state or are on the so-called “black list” of tax havens drawn up by the EU. This also includes countries that have been on the grey list for two years, currently Turkey, for example.

Implementation of the public CbCR

The Public Country-by-Country Reporting Directive is expected to provide more detailed information on implementation. Still pending are final approval from Parliament and the Council of Ministers in the fall, which is likely to be a formality.  According to current information, the member states will have 18 months to transpose the directive into national law. The future notification of the additional “EU CbCR” is to be made within 12 months after the end of the financial year, analogous to the existing CbCR rules.


31 December 2020 marked the point at which the United Kingdom formally completed separation from the European Union. This resulted in the termination of future EU laws, regulations and directives from being applied to UK law. 


One of the immediate impacts Brexit was regarding DAC 6 requirements in the UK, in relation to reporting of cross-border tax arrangements. The UK repealed previously enacted UK legislation regarding DAC 6 and instead opted to only require the OECD minimal requirements in respect to reporting cross-border tax arrangements. This was the first clear example of the UK government independently deciding on tax policy without the need to consult the EU and even reversing previously enacted legislation which came as a surprise to many.


As the EU have only recently indicated a future requirement for public EU CBCR, it remains unclear what the future UK position will be regarding public CBCR disclosure. As mentioned above, the UK does not currently implement public disclosure but the UK legislation does give the opportunity to implement this in the future. It remains unclear at this stage whether the UK will again tread on their own path in respect to public CBCR policy or whether they follow the lead of the EU.

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