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By Ben Stupples
Countries are pushing back the deadline for multinational companies to submit their first global tax reports in a sign that governments may be struggling to implement the required filing systems.
In a bulletin published Nov. 23, the Australian Taxation Office said it extended its deadline until Feb. 15. In a Nov. 24 brief, meanwhile, the Irish Revenue said companies will have until the end of February to submit their first global tax reports to the government.
Known as country-by-country reporting, the filings are the most widely adopted policy from the OECD’s 15-action project to curb tax avoidance from multinationals. The measure aims to provide a clearer picture of companies’ operations for each country in which they are active. Most countries that adopted the policy for a company’s 2016 accounts still have a deadline of Dec. 31, 2017.
While the Australian Taxation Office gave no reason pushing back its deadline until next year, the Irish Revenue cited an issue with its electronic filing system for the country-by-country reports. Revenue expects to receive a standard module from the European Commission by mid-December, and the Irish system will stay open until Feb. 28.
The commission’s standard validation module is part of the “software implementation” rules agreed among the OECD’s members, a Revenue spokeswoman told Bloomberg Tax in a Nov. 27 email. The late changes to the country-by-county reporting format include a provision to allow multinational groups to cite their commercial name in additional to their legal one, she added.
Press offices for the ATO and European Commission didn’t return requests for comment.
Under the Organization for Economic Cooperation and Development’s guidance, multinationals should file country-by-country reports within 12 months of the fiscal year in question.
As a result, countries that introduced the policy for a company’s 2016 accounts originally expected to receive the data by the end of the 2017 calendar year. Country-by-country reporting only applies to companies with annual group revenues of at least 750 million euros ($890.9 million).
Alex Cobham, chief executive the Tax Justice Network, the main advocacy group behind country-by-country reporting, told Bloomberg Tax that he was surprised by the deadline delays.
There is some “flexibility” to comply with the base erosion and profit shifting project, he said. But as the organization is committed to collecting data as part of the project to measure its progress, delays in countries receiving relevant data may have a “knock-on effect,” he added.
The European Commission cites its validation module as part of the required technology for European Union member states to exchange data with each other, according to an April 2015 meeting summary.
Companies filing country-by-country reports will typically submit them to the tax authority of their headquarter jurisdiction. Under agreements to share the data, the authority will then exchange the reports with its overseas counterpart in each jurisdiction where the company has activity.
With assistance from Ali Qassim.
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