The UK House of Commons Notice of Amendments, as of 29 June 2020, includes an interesting proposed amendment re: Country-by-Country (CbC) reporting. A CbC report would be submitted as part of the UK group’s tax strategy for taxpayers subject to the DST.
The CbC public transparency initiative was included in proposed legislation in other countries, including France and the U.S. These proposals were never finalized, and the UK proposal, for certain groups, may be nearing certainty.
The public transparency of a company’s tax strategies is nearing reality with the advancement of recent updates to the UK’s Finance Bill.
The UK is continuing its leadership objectives in adopting BEPS initiatives, as shown in this latest initiative.
EY’s Global Tax Alert is provided for reference:
Click to access 2016G_00446-161Gbl_UK%20amends%20mandatory%20requirement%20for%20businesses%20to%20publish%20tax%20strategy.pdf
The legislation stipulates that the published tax strategy must cover in relevant, up-to-date detail regarding the:
• Approach of the UK group to risk management and governance arrangements in relation to UK taxation
•Attitude of the group to tax planning (so far as affecting UK taxation)
•Level of risk in relation to UK taxation that the group is prepared to accept
• Approach toward dealings with HMRC
The process of developing the public UK tax strategy should be aligned with the global policy and tax risk framework, especially as other countries look to follow the UK’s lead. Transparency is the key driver that continues to drive post-BEPS legislation, with no apparent slowdown envisaged.