Overview

The Income Tax Act sets out Canada's rules on country-by-country (CbC) reporting. The CbC report is a form that multinational enterprise groups are required to complete and file annually to provide information of their global operations in each tax jurisdiction where they do business.

This filing requirement is part of a global initiative by the Organisation for Economic Cooperation and Development (OECD)/G20 to enhance transparency for tax administrations.

Canada is now exchanging these reports with its international partners. Canada is one of 69 nations exchanging information, which helps the CRA to better risk assess multinationals for tax compliance.

Reporting obligations

Ultimate parent entities of multinational enterprise groups with more than €750 million in consolidated group revenue in the immediately preceding fiscal year have to file a Country-by-Country Report, which is due 12 months after the last day of the reporting fiscal year. Late filing, not filing, making false statements or omitting information from returns may result in penalties.

Paragraph 233.8(3)(b) of the Income Tax Act concerns the filing obligations of constituent entities in Canada and refers to the reporting requirements of the ultimate parent entity in the jurisdiction of residence. General information on these foreign requirements can be found on the Country-Specific Information on Country-by-Country Reporting Implementation page of the OECD website which provides a high level snapshot for tax administrations and MNE Groups as to the first reporting periods, and the availability of surrogate filing and local filing.

CRA Guidance

• See Form RC4649, Country-by-Country Report to determine if it applies to your operations.
• See Guide RC4651, Guidance on Country-by-Country Reporting in Canada to assist you in completing the report.

OECD Guidance

• Guidance on the implementation of CbC Reporting
• Guidance on the appropriate use of information contained in CbC Reports
• Country-by-Country Reporting: Handbook on Effective Implementation
• Country-by-Country Reporting: Handbook on Effective Tax Risk Assessment
• Action 13 Report: Guidance on Transfer Pricing Documentation and Country-by-Country Reporting

Information Exchanges

In June 2018, Canada joined its international partners in the first exchanges of information on the revenue, profit, tax and accumulated earnings information of multinational enterprises.

For a list of all bilateral exchange relationships that are currently in place for the automatic exchange of CbC reports between tax authorities, please refer to the OECD web page on Activated exchange relationships for Country-by-Country reporting.

Information obtained from the CbC reports is secure and will be used for high level transfer pricing risk assessment, the assessment of other base erosion and profit shifting (BEPS) related risks and for statistical and economic analysis.

Related Links

• Income Tax Act – 233.8