CRA revises its CbC reporting publication

In November, CRA published a revised description in RC 4651 of country-by-country reporting (CbC) obligations. Since we have a copy of the historic CRA website (in addition to scraping the current CRA website every 4 hours), the previous 24 March 2017 version of RC4651 is also available for comparison purposes.

Additions by CRA include:

  • “Given the widespread understanding of CbC reporting requirements by multinationals, any failure to file a CbC report as required under subsection 233.8(3) … will, for the 2018 and subsequent filing years, be presumed to be gross negligence [for purpose of s. 162(10) penalties] unless special circumstances exist that explain the failure to file.”
  • CRA considers that a private holding company can qualify as an “ultimate parent entity” (UPE) even if there are public corporations lower in the corporate chart.
  • There now is an explicit statement that “The only exemption from filing is for an MNE group with consolidated group revenue below the €750 million threshold. There are no exemptions for any specific industries, investment funds, entities with tax exempt status, non-corporate entities or entities that are not publicly listed.”
  • A reporting entity is now generally permitted to report in one of the other four qualifying currencies (the euro, USD, pound or Australian dollar) even where it has not made a functional currency election.
  • CRA states that a business entity “that is organized under the laws of a particular country but that is not tax resident in any jurisdiction” can be the ultimate parent entity of a multinational group, and that there is a special code for such an entity. (CRA does not explain how you can do this.)

Summaries of RC4651 “Guidance on Country-By-Country Reporting in Canada” 23 November 2018 under s. 233.8(1) – “multinational enterprise group”, – “ultimate parent entity”, s. 233.8(3), s. 233.8(6), s. 162(10), s. 241(1), and s. 247(2).