Andorra is a small country located in the Pyrenees Mountains between France and Spain. The country has a unique tax system, with a low corporate tax rate and no value-added tax. However, Andorra has also implemented country-by-country reporting (CbC) requirements for multinational corporations operating within its borders.

In Andorra, the CbC reporting requirement was introduced in 2018 and is applicable to multinational companies with consolidated group revenue of more than €750 million (approximately $869 million). These companies must file a CbC report that includes information about their revenues, profits, taxes paid, and assets in each country where they operate.

The CbC report must be filed with the Andorran tax authority, the Departament d’Estudis i Recursos Tributaris (DERT), and must be submitted within 12 months from the end of the reporting year.

The CbC report must provide detailed information about the company’s operations in each country where it operates, including the number of employees, revenues generated, pre-tax profits, taxes paid, and assets. The report must also identify the company’s subsidiaries and branches in each country, and provide details about its ownership and control structure.

The report must be prepared in accordance with the guidelines issued by the Organisation for Economic Cooperation and Development (OECD). Andorra has also issued rules and forms to be used for filing the CbC report, which require the disclosure of certain additional information, such as the details of the entities in the group responsible for the management and control of intellectual property.

Multinational corporations must also provide information about any “aggressive tax planning” structures they have used to minimize their tax liability. This includes any transactions between subsidiaries or branches that may have the aim of reducing taxes.

The CbC report is used by tax authorities in Andorra to assess the risk of tax evasion or tax avoidance by multinational corporations. By providing detailed information about the company’s operations in each country, it is expected to make it easier for tax authorities to identify any inappropriate or suspicious activity.

In conclusion, the submission of the country-by-country report is an important requirement for multinational corporations operating in Andorra seeking to comply with national and international tax laws. Filing this report helps improve tax transparency and prevent tax evasion, contributing to tax equity and a fairer tax system in the country.