Country-by-Country Data Collection & Reporting

As part of the OECD’s Base Erosion and Profit Shifting (BEPS) initiative, mandatory Country-by-Country (CbC) reporting is an imminent prospect for multinational corporations (MNCs) across the globe. With the first reporting periods for some jurisdictions taking effect as early as 1 January 2016, companies now have to rapidly plan how they will comply with these CbC reporting requirements.

Using prescribed templates, MNCs will be required to report revenue, profit before income tax, income taxes paid and accrued, number of employees, stated capital, retained earnings, and tangible assets in each jurisdiction in which they operate.


What challenges does this present?

In order to mitigate the significant risk of inaccurate and/or incomplete disclosures, it is essential that MNCs understand and have a plan to deal with the two key practical challenges they will face.

DATA COLLECTION
The collection of relevant and accurate data in a consistent format across the whole Group, made more difficult given the information required is often not available in internal systems on a country-by-country basis.

DATA CONSOLIDATION, RECONCILIATION AND REPORTING
It is crucial not only to be able to consolidate and report the data in the required format, but also to be able to reconcile public financial statements, legal entity books and local tax returns with the disclosures provided in the templates.

In respect of both of these challenges, and given the size, diversity and geographical spread of many MNCs, it is critical that MNCs leverage the right technology in order to ensure they are equipped to be able to comply with the CbC reporting requirements.

The Solution
CCH Integrator™ Country-by-Country Data Collection & Reporting Module

CCH Integrator™ Country-by-Country Data Collection & Reporting is an “out-of-the-box” web-based software solution that can be quickly and easily deployed by MNCs to facilitate the preparation and disclosure of accurate and auditable CbC reporting information.

It gives MNCs the ability to streamline and automate the collection, consolidation, validation and reporting process, saving valuable time and resources. It also provides the visibility required to better manage global tax risk.

There are four key features of the CCH Integrator Country-by-Country Data Collection & Reporting technology which make this possible.

Data Collection

  • Include details on the ability to bulk load structured data (e.g, trial balance, employee headcounts, taxes paid, etc) and pre-populate the CBC reports for the whole group in one simple process.
  • Easily accessible and intuitive web-based questionnaire to facilitate the collection and/or review of data that is not readily accessible at head office.
  • Flexibility to adapt the OECD CbC report to include any additional reporting of certain financial information such as intercompany interest, royalties and other payments for developing countries including Argentina, Brazil, China, Columbia, India, Mexico, Turkey and South Africa
  • Web-based to ensure no deployment effort for local teams.

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Consolidation, Reconciliation, Analysis and Reporting

  • A robust currency conversion and consolidation engine ensuring no time is wasted consolidating or reconsolidating information as it is supplied.
  • Ability to quickly drill-down from the consolidated position into individual countries and entities in real time.
  • Plan ahead by performing key financial ratio and statistical analysis on CbC data to identify inconsistencies and significant tax/transfer pricing risks, e.g. effective tax rate, profit before tax to employees, top 10 countries by profit and more.

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Global Compliance

  • An OECD compliant report that is automatically populated
  • Compliant reports for other countries as they adopt Country-by-Country Reporting.
  • Wolters Kluwer publish and maintain all reports in accordance with legislation.

Audit Trail, Workflow and Status Tracking

  • Track and monitor the status of the data collection process from each country to ensure deadlines are met.
  • Detailed audit trail tracks user changes with date and time stamps

Other Benefits

  • CCH Integrator can also be used to support the collection, calculation and disclosure of your other interrelated compliance and reporting requirements (eg, tax provision, tax return, statutory accounts) allowing you to integrate and more easily align and reconcile related disclosures.

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