4. This annual report contains the findings of the first annual peer review process (“phase one”) which focuses on the domestic legal and administrative framework, as well as on certain aspects of the exchange of information network, and of appropriate use of CbC reports.
5. The structure of each individual section relating to each reviewed jurisdiction is as follows:
Overview of implementation: current status;
Domestic legal and administrative framework;
Exchange of information;
Appropriate use;
The jurisdictions’ response to the review (if any).1
6. Jurisdictions which have joined the Inclusive Framework later than February 2017 (i.e. when the first annual peer review commenced) have not necessarily been able to participate in this first annual peer review process. It is expected that they will be included in the following annual peer review process starting in 2018.
7. The peer review has been undertaken by an Ad Hoc Joint Working Party 6 – Working Party 10 sub-group (hereafter referred to as the “CbC Reporting Group”).2
8. The peer review evaluates the Inclusive Framework member’s implementation of the standard against an agreed set of criteria.3 These criteria are set out in terms of reference, which include each of the elements that a jurisdiction needs to demonstrate it has fulfilled in order to show proper implementation of the standard. The Action 13 Report (OECD, 2015) recommended that the first CbC Reports be required to be filed for fiscal years beginning on or after 1 January 2016. It was however acknowledged that some jurisdictions may need time to follow their particular domestic legislative process in order to make necessary adjustments to the law. In this respect, the peer review takes account of the specific timeline followed by certain jurisdictions, and the review will focus on the efforts taken by these jurisdictions in order to meet their commitment to implement the minimum standard.
9. The terms of reference focus on the following three key aspects of the CbC Reporting standard that a jurisdiction must meet:
A) the domestic legal and administrative framework;
B) the exchange of information framework; and
C) the confidentiality and appropriate use of CbC reports.
10. The manner in which the peer review is undertaken is set out in an agreed methodology. The methodology sets out the procedural mechanisms by which jurisdictions will complete the peer review, including the process for collecting the relevant data, the preparation and approval of reports, the outputs of the review and the follow up process.
11. The methodology recognises that the three key aspects of CbC Reporting will be implemented and become operational over the coming years, starting with the domestic legal and administrative framework being put in place generally in 2016, followed by the international exchanges of CbC reports to occur for the first time by mid-2018, and the work to ensure that CbC reports are kept confidential and used appropriately in any subsequent tax compliance actions.
12. Given the fact not all of these three key aspects are being implemented at the same time, these three key aspects will be reviewed according to a staged approach. A staged review enables the review of aspects of CbC Reporting to occur as they are implemented, starting in 2017 and allowing for the early detection of inconsistencies in implementing the minimum standard as well as providing an opportunity for early remedial action to be taken by jurisdictions, if necessary.
13. There are three phases for the peer review structured into annual reviews, starting respectively in 2017, 2018 and 2019. Each phase will focus on different key aspects of jurisdictions’ implementation so as to mirror the staged introduction of the different elements that make up the CbC Reporting and exchange of information framework.
14. An annual review process will allow the CbC Reporting Group to report annually to the Inclusive Framework and to take into account any updates since the previous review, as well as follow-up actions of reviewed jurisdictions further to any recommendation made by the Inclusive Framework.
15. The review of phase one (starting in 2017) focused on the domestic legal and administrative framework. It also covered certain items of the exchange of information network and included an initial review of certain aspects of confidentiality and appropriate use, as these are prerequisites for exchange of information.
16. During phase two (starting in 2018), the review will focus on the exchange of information framework and appropriate use. During phase three (starting in 2019), the review will cover all three key aspects of jurisdictions’ implementation, including the actual exchange of CbC reports.
17. Each year’s review process culminates in the production of an annual report on CbC Reporting implementation.
18. As per the agreed methodology, this phase one annual report (2017) covers only the review of the key aspects as follows:
