Frontline Involvement: Our lawyers have been on the front lines of significant global tax updates for decades via participation in the Organisation for Economic Co-operation and Development (OECD) business advisory council, International Chamber of Commerce (ICC), and the United Nations Committee of Experts in International Taxation (advisory membership). Our involvement in these organizations allows us to be engaged on the cutting edge of potential developments that may impact our clients, enabling us to anticipate evolutions or adaptations in the effective tax rate strategies of our clients. The extensive experience of the McDermott international tax and transfer pricing teams in the rapidly evolving world of global taxation is also reflected in their long-term authorship of six leading treatises published by Thomson Reuters, which are updated semi-annually or annually (depending on the publication). Please find a list of our treatises under the “Thought Leadership” section of this page.
In October 2015, final recommendations on Base Erosion and Profits Shifting (BEPS) were released, with the intention that they would overhaul the way in which the profits of multinational enterprises (MNEs) are allocated among countries. BEPS is one of many elements of epochal change that will impact the global effective tax rate (ETR) of MNEs in the coming years.
Country-by-Country reporting (CbCR) is the first, almost globally adopted output of the BEPS process currently facing MNEs. The multilateral instrument, released in November 2016, is the second. It raises some potentially far-reaching questions with respect to traditional operating models and supply chain structures, and also affects the future of cross-border dispute resolution. Harnessing the potential upsides and downsides of these and the other evolutions will be a driver of the future ETR of MNEs.
What is CbCR?
CbCR will require MNEs to report to their home tax administration an overview of worldwide assets, functions, employees, taxes paid, revenues earned and certain other indicators of economic activity.
When is it applicable?
For most MNEs, the first CbC reports will be due by December 31, 2017, meaning MNEs should be proactively working on the collection of the necessary data, and modeling the impact on their ETRs, now.
How we can help?
McDermott is uniquely positioned to support MNEs in successfully navigating the new international tax landscape that CbC reporting and the other evolutions will usher in. Most importantly: