Strategizing Multinational Tax Risks

A surrogate parent entity should file a CbC report with the Luxembourg tax authorities in one of the following cases:

• The ultimate parent entity (UPE) is not obliged to file a CbC report in its country of residence,
• The UPE is obliged to submit a CbC report, but there is no automatic exchange of CbC reports between Luxembourg and the country of residence of the UPE or
• The UPE is obliged to submit a CbC report,and there is automatic exchange of CbC reports, but due to systematic failure, no effective exchange of information takes place.

As the terminology includes “obliged” vs. voluntary filings in some countries, the filing entity and disclosure rules should be reviewed.  Additionally, there are significant penalties for late/non-filing.