Companies Must Engage in OECD Peer Review Process

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By Kevin A. Bell

Multinational companies must become actively engaged in the OECD’s peer review process evaluating how countries implement rules requiring reporting of groups’ global taxes and profits, a GE official said.

William Morris, General Electric Co.'s global tax policy director, said March 27 that the peer review process, monitoring the way countries implement rules requiring country-by-country reporting of multinationals’ tax and profits, “is incredibly important.”

“From the business point of view, the peer review process is one of the real pluses to come out of the BEPS process,” Morris told the Bloomberg BNA Baker McKenzie Paris conference. “It may be a small beginning, but it is something that if carried through regularly over a series of years is going to be very important to ensure consistency and the proper applicability of the BEPS procedures.”

The Organization for Economic Cooperation and Development is watching closely to make sure countries comply with new rules requiring country-by-country reporting—the most widely adopted measure of the organization’s sweeping plan to curb tax base erosion and profit shifting by multinational companies.

Terms of Reference

On Feb. 1, the OECD released a document, approved by the Inclusive Framework on BEPS, that forms the basis of the peer review of Action 13 country-by-country reporting.

The document includes the terms of reference explaining the criteria for assessing the implementation of the minimum standard. It also sets out the procedural mechanism by which jurisdictions will complete the peer review, including the process for collecting the relevant data, the preparation and approval of reports, the outputs of the review and the follow-up process.

Ad Hoc Panel

An ad hoc OECD group is developing the peer review process for country-by-country reporting, said Brian Jenn, an attorney-adviser in Treasury’s Office of International Tax Counsel and a U.S. delegate to the OECD’s working party on transfer pricing, speaking on the same March 27 conference panel as Morris.

The ad hoc group consists of members from Working Party No. 6 and Working Party No. 10.

Country-by-country reporting, the 13th action item of the OECD’s 15-point Action Plan on Base Erosion and Profit Shifting, calls for companies to report to tax authorities on the amount of taxes paid and profits earned in each country of operation, and for countries to automatically exchange that information with other governments while ensuring confidentiality.

Country-by-country reporting aims to give tax authorities the information needed to understand the activities of multinational companies and to assess transfer pricing risk.

Peer Review

The Action 13 standard on country-by-country reporting one of the four BEPS “minimum standards,” required to be adopted by the countries that have signed on to the BEPS project. Each of the four BEPS minimum standards is subject to peer review to ensure timely and accurate implementation.

All countries that are members of the OECD’s “inclusive framework” on BEPS—the organization’s effort to get as many countries as possible to adopt the BEPS measures—have committed to implementing the minimum standards and participating in the peer reviews.

Jenn said March 27 that the “terms of reference are essentially the standards by which countries will be measured in the peer review process.”


“We also developed questionnaires that will be sent to jurisdictions so they can provide information on their legal framework, their exchange agreements, and their practices with respect to exchange, and ultimately on how they are using this data,” Jenn said.

The OECD will receive those questionnaires as inputs into the peer review process, Jenn said. There will be an opportunity for other countries to provide their experiences with the country whose reporting requirements are being evaluated.

There will eventually be an overall evaluation of the country’s practices regarding their legal framework, information exchange network, exchange practices, “and ultimately appropriate use under confidentiality,” Jenn said. “So all those things will be taken into account.”

To contact the reporter on this story: Kevin A. Bell in Washington at

To contact the editor responsible for this story: Molly Moses at

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