Country-by-Country Reporting | New notification duty in the field of taxation in Slovakia from March...
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News Flash February 15, 2017 Country-by-Country Reporting - New notification duty in the field of taxation in Slovakia from March 2017
Transcript of Country-by-Country Reporting | New notification duty in the field of taxation in Slovakia from March...
News Flash
February 15, 2017
Country-by-Country Reporting -
New notification duty in the field of
taxation in Slovakia from March 2017
News Flash I Accace Slovakia I Country-by-Country Reporting
Country-by-Country Reporting - new notification duty in the
field of taxation in Slovakia from March 2017
In December 2016 we informed you in our News Flash about the expected implementation of the rules of
the European Union for so-called “country-by-country reporting” (CbCR) for multinational groups with total
consolidated group revenue reaching 750 million EUR or more. These rules were approved by the
National Council of the Slovak Republic on 1 February 2017 within the Amendment to the Act on
international assistance and cooperation in tax administration and will be effective as of 1 March 2017.
The publication of these rules in the Collection of Laws of the Slovak Republic is expected in the following
days. The rules are based on the OECD Model Legislation for CbCR, which is a part of the updated
OECD Transfer Pricing Guidelines since 2015.
The respective rules bring new notification duties in the field of taxation for entities that belong to such
multinational groups. The notification of the reporting entity that will file a country-by-country report
should be done till the end of March 2017 – within the filing deadline for corporate income tax
return. Otherwise there is a threat of penalty.
The aim of the CbCR rules
The rules for the CbCR shall help to tax
authorities to expose potential transfer pricing
risks, or any other risks resulting from tax base
erosion and profit shifting. The CbCR will also
be used for the purpose of economic and
statistical analyses.
Who is affected by the CbCR rules
The CbCR rules are applicable to multinational
groups with total consolidated group
revenue reaching 750 million EUR or more,
and obligate them to annually file a “Country-by-
Country Report” with the tax administration.
The reports shall contain aggregate information
based on a defined template about the amount
of revenue, profit (loss) before income tax,
income tax paid, income tax due, registered
share capital, retained earnings, number of
employees, tangible assets other than cash or
cash equivalents with regard to each tax
jurisdiction in which the multinational group
operates; including the identification of each
constituent entity of the multinational group (i.e.
members of the group) and the nature of the
main business activity of such constituent entity.
These data will be subject to the automatic data
exchange between countries where the
members of multinational companies are seated.
Which member of the multinational
group is required to file a Country-by-
Country Report, i.e. is the reporting
entity
The filing of reports is obligatory for ultimate
parent entities of the multinational groups with
total consolidated group revenue reaching 750
million EUR. or more. In some cases this duty
can apply to another member of the
multinational group.
Under certain conditions the rules allow
transferring of the report filing obligation from the
ultimate parent entity to a surrogate parent
entity.
The rules also define exceptions from the report
filing obligation by the ultimate parent company,
when a constituent entity which is not the
ultimate parent entity of a multinational group
shall file a report.
The reporting entity shall file the country-by-
country report in the country of its tax residence.
News Flash I Accace Slovakia I Country-by-Country Reporting
In the Slovak Republic only small number of
reporting entities is expected.
The ultimate parent entities and surrogate
parent entities are filing the report for the first
time for the fiscal year of 2016. If the report is to
be filed by other constituent entity, it shall be
filed for the first time for the fiscal year of 2017.
Notification of the reporting entity
The CbCR rules also include the obligation to notify the tax administration of the reporting entity that will file the country-by-country report. This notification duty concerns in Slovakia
every Slovak member of a multinational
group with total consolidated group revenue
reaching 750 million EUR or more. This
notification duty concerns the foreign entities
with a registered branch in Slovakia, as well.
In the notification, the company shall notify
whether it is the ultimate parent entity or the
surrogate parent entity or the constituent entity
required to file the country-by-country report. If
the company is none of these entities, it shall
notify the Slovak Financial Directorate of the
commercial name, registered office, ID
number of the reporting entity, including of
the tax residence of the reporting entity, and
this at latest on the last day of the corporate
income tax return filing deadline (i.e. till 31
March 2017 for the fiscal year 2016). For this
notification there is no particular form provided.
For the purpose of this notification there is no
defined template.
Penalty
For failure to file the country-by-country report a
penalty can be imposed by the tax authority up
to 10 000 EUR.
For failure to notify the reporting entity a penalty
can be imposed up to 3 000 EUR.
Recommendations
For carrying out the notification duty, we
recommend you contacting your global tax team
and confirm with them who will be the
reporting entity (i.e. who will be filing the
country-by-country report).
We also recommend paying higher attention to
the matters of transfer pricing and to the
documentation of applied transfer prices in
transactions with related parties. In relation to
this we would like to bring to your attention our
latest eBook on Transfer pricing rules in
Slovakia in 2017.
Disclaimer
Please note that our publications have been prepared for general guidance on the matter and do not represent a
customized professional advice. Furthermore, because the legislation is changing continuously, some of the
information may have been modified after the publication has been released. Accace does not take any responsibility
and is not liable for any potential risks or damages caused by taking actions based on the information provided
herein.
News Flash I Accace Slovakia I Country-by-Country Reporting
Contact
Katarína Balogová
Tax Director
E-Mail: [email protected]
Tel: +421 2 325 53 000
About Accace
With more than 330 professionals and branches in 7 countries, Accace counts as one of the leading
outsourcing and consultancy services providers in Central and Eastern Europe. During past years,
while having more than 1400 international companies as customers, Accace set in motion its strategic
expansion outside CEE to become a provider with truly global reach.
Accace offices are located in Czech Republic, Hungary, Romania, Slovakia, Poland, Ukraine and
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