On December 21, 2015, the Treasury Department and the IRS issued highly anticipated proposed regulations [REG-109822-15] that would require annual U.S. country-by-country (CbC) reporting for U.S.-parented multinational enterprise (MNE) groups. In issuing the regulations, the Treasury Department has demonstrated its intent to meet the multilateral commitment it made in the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) project negotiations to collect the CbC information for purposes of exchanging it with other governments. By adhering to the requirements of the Administrative Procedures Act with a 90 day comment period for the proposed regulations, Treasury has provided a meaningful timeframe for public comment and may allay Congressional concerns. Implementation of CbC reporting represents a significant new compliance burden for U.S. companies, which should begin preparing for this new reporting requirement as soon as possible.
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