Iceland has implemented Country-by-Country (CbC) Reporting requirements in accordance with the Base Erosion and Profit Shifting (BEPS) Action Plan 13 developed by the Organisation for Economic Co-operation and Development (OECD).

Multinational Enterprises (MNEs) with a consolidated group revenue of at least €750 million in the previous fiscal year are required to file a CbC report in Iceland. The report should contain information on the global allocation of income, taxes paid, and other indicators of economic activity among tax jurisdictions in which the MNE group operates.

The ultimate parent entity of the MNE group is responsible for filing the CbC report if it is resident in Iceland. If the ultimate parent entity is not resident in Iceland, the obligation to file the CbC report falls on the surrogate parent entity, if any, that is resident in Iceland.

The deadline for filing the CbC report in Iceland is within 12 months from the end of the fiscal year of the MNE group. Failure to file the CbC report or providing false or misleading information can result in penalties.

Iceland has implemented a penalty regime for non-compliance with CbC Reporting requirements. MNEs that fail to file the CbC report or provide incomplete or inaccurate information can be fined up to ISK 1 million (approximately €6,500).

MNEs must file the CbC report in Iceland electronically through the Icelandic Revenue and Customs’ (IRC) online portal. The IRC provides a CbC Reporting module that allows MNEs to upload their CbC report in XML format. The IRC will send a confirmation of receipt once the report has been successfully submitted.

In addition to the CbC report, MNEs operating in Iceland may be required to prepare and file Transfer Pricing Documentation (TPD) if they have cross-border related party transactions. The TPD report should provide detailed information on the pricing of related party transactions within the MNE group.

In conclusion, Iceland has implemented CbC Reporting requirements as part of its compliance with the OECD’s BEPS Action Plan 13. MNEs with a consolidated group revenue of at least €750 million in the previous fiscal year must file a CbC report in Iceland. The deadline for filing the CbC report is within 12 months from the end of the fiscal year of the MNE group. Failure to comply with CbC Reporting requirements can result in penalties, and MNEs must also prepare and file a Transfer Pricing Documentation report if required.