The BEPS Action 13 report provides a template for multinational enterprises (MNEs) to report annually and for each tax jurisdiction in which they do business the information set out therein. This report is called the Country-by-Country (CbC) Report.

To facilitate the implementation of the CbC Reporting standard, the BEPS Action 13 report includes a CbC Reporting Implementation Package which consists of (i) model legislation which could be used by countries to require the ultimate parent entity of an MNE group to file the CbC Report in its jurisdiction of residence including backup filing requirements and (ii) three model Competent Authority Agreements that could be used to facilitate implementation of the exchange of CbC Reports, respectively based on the:

1. Multilateral Convention on Administrative Assistance in Tax Matters;
2. Bilateral tax conventions;
3. Tax Information Exchange Agreements (TIEAs)

Currently, around 120 jurisdictions have law in place introducing a CbC reporting obligation. In addition, as of February 2024, over 3300 relationships are in place for the exchange of CbC reports. This means that substantially every MNE with consolidated group revenue of at least EUR 750 million is already required to file a CbC report, and the gaps that do remain are closing.

The first exchanges of CbC reports took place in June 2018 and, with the OECD’s support, tax administrations are incorporating CbC reports into their tax risk assessment and assurance processes to understand better the risks posed to their jurisdictions. CbC reports are also at the heart of other programmes to provide greater tax certainty to MNEs, including the OECD International Compliance Assurance Programme (ICAP).

As of March 2024, there are over 4300 bilateral exchange relationships activated with respect to jurisdictions committed to exchanging CbC reports, and the first automatic exchanges of CbC reports took place in June 2018. These include exchanges between the 106 signatories to the CbC Multilateral Competent Authority Agreement, between EU Member States under EU Council Directive 2016/881/EU and between signatories to bilateral competent authority agreements for exchanges under Double Tax Conventions or Tax Information Exchange Agreements, including over 41 bilateral agreements with the United States. Jurisdictions continue to negotiate arrangements for the exchange of CbC reports and the OECD will publish regular updates, to provide clarity for MNE Groups and tax administrations.

The multilateral Convention on Mutual Administrative Assistance in Tax Matters (the Convention), by virtue of its Article 6, requires the Competent Authorities of the Parties to the Convention to mutually agree on the scope of the automatic exchange of information and the procedure to be complied with. Against that background, the multilateral Competent Authority Agreement on the Exchange of CbC Reports (CbC MCAA) has been developed, based on the Convention. In addition, two further model competent authority agreements have been developed for exchanges of CbC Reports, one for exchanges under Double Tax Conventions and one for exchanges under Tax Information Exchange Agreements.

The purpose of the CbC MCAA is to set forth rules and procedures as may be necessary for Competent Authorities of jurisdictions implementing BEPS Action 13 to automatically exchange CbC Reports prepared by the Reporting Entity of an MNE Group and filed on an annual basis with the tax authorities of the jurisdiction of tax residence of that entity with the tax authorities of all jurisdictions in which the MNE Group operates. A particular bilateral relationship under the CbC MCAA becomes effective only if both jurisdictions have the Convention in effect, have filed the required notifications under Section 8 and have listed each other.

The OECD provides a standardised electronic format for the exchange of CbC Reports between jurisdictions – the CbCR XML Schema – as well as the related User Guide.

A dedicated XML Schema and User Guide have also been developed to provide structured feedback on received CbC information. The CbCR Status Message XML Schema will allow tax administrations to provide structured feedback to the sender on frequent errors encountered, with a view to improving overall data quality and receiving corrected information, where necessary.

Tax administrations have encountered a number of concerns with the data in CbC reports filed to date, and descriptions of the most common of these have been compiled in a table that is available to view. MNEs within the scope of CbC reporting should review these descriptions and ensure that these errors are not repeated in CbC reports they are preparing. Where a tax administration identifies that a CbC report filed with it contains errors (including but not limited to those described in the table) it should require these errors to be corrected by the Reporting MNE.

One of the conditions for receiving and using CbC Reports is that a jurisdiction must have in place the necessary framework and infrastructure to ensure the appropriate use of CbCR information. To assist jurisdictions in complying with this condition, the OECD has released guidance on the meaning of "appropriate use", the consequences of non-compliance with the appropriate use condition and approaches that may be used by tax authorities to ensure the appropriate use of CbCR information.

Country-by-Country Reporting: Handbook on Effective Implementation is a practical guide to assist countries in implementing CbC Reporting in line with the Action 13 minimum standard. This includes chapters on the filing and use of CbC Reports, the exchange of CbC Reports, operational aspects of CbC Reporting and guidance, stakeholder engagement and training.

Country-by-Country Reporting: Handbook on Effective Tax Risk Assessment supports countries in the effective use of CbC Reports by incorporating them into a tax authority's risk assessment process. The handbook explores the advantages CbC Reports offer over other sources of data for risk assessment, how CbC Reports may be used by a tax administration to risk assess MNE groups including some of the tax risk indicators that may be identified, a number of challenges tax administrations may face in using CbC Reports and how these may be addressed, and other data sources that should be used alongside CbC Reports, where available.