Country-by-Country (CbC) reporting is a new initiative aimed at promoting transparency and accountability in multinational corporations (MNCs). CbC reporting requires MNCs to report detailed information on their operations, taxes paid, and employees in each country they operate in. This information is then made available to tax authorities to ensure that companies are paying their fair share of taxes.

Austria has adopted CbC reporting as a key part of its tax policy. This article will discuss how CbC reporting is presented in Austria, including the relevant laws and regulations, and the data needed to understand the issue in the country.

Background on CbC Reporting

CbC reporting was introduced as part of the OECD’s Base Erosion and Profit Shifting (BEPS) project, which aims to combat tax avoidance by MNCs. BEPS identified that MNCs were artificially shifting profits to low-tax jurisdictions, resulting in reduced tax revenue for high-tax countries.

CbC reporting requires MNCs to report detailed financial and tax-related information for each jurisdiction they operate in. This information includes revenue, profit, taxes paid, employees, and tangible assets. By providing this information, tax authorities can better understand how MNCs are operating and whether they are paying their fair share of taxes.

CbC Reporting in Austria

Austria has implemented CbC reporting as part of its tax policy. The relevant laws and regulations are contained in the Austrian Transfer Pricing Documentation Act (TPDG). The TPDG requires MNCs with consolidated group revenues of over €750 million to file a CbC report with the Austrian tax authorities.

The CbC report must be filed within 12 months of the end of the reporting fiscal year. The report must be in the XML format and must include the following information:

• The MNC’s revenues and profits
• The taxes paid and accrued
• The number of employees
• The tangible assets held
• The main business activities
• The country of tax residency

The information provided in the CbC report is used by tax authorities to assess the MNC’s compliance with transfer pricing rules. Transfer pricing refers to the pricing of goods and services between related parties, such as subsidiaries of the same MNC. Transfer pricing rules aim to ensure that transactions between related parties are conducted on an arm’s length basis, meaning that the prices charged are similar to those charged in transactions between unrelated parties.

The CbC report provides tax authorities with a better understanding of the MNC’s operations, enabling them to identify potential transfer pricing issues. If an MNC is found to have breached transfer pricing rules, it may be required to pay additional taxes and penalties.

Data on CbC Reporting in Austria

The following data provides an overview of CbC reporting in Austria:

• The TPDG came into effect on 1 January 2016
• The first CbC reports were due in 2017 for the 2016 fiscal year
• In 2018, 212 MNCs filed a CbC report with the Austrian tax authorities
• The total revenue reported by these MNCs was €5.5 trillion
• The total profit reported was €272 billion
• The total number of employees reported was 10.6 million
• The total taxes paid and accrued was €217 billion
• The industries with the highest revenue were financial and insurance activities, manufacturing, and wholesale and retail trade
• The industries with the highest profit were financial and insurance activities, manufacturing, and professional, scientific and technical activities

Conclusion

CbC reporting is an important initiative aimed at promoting transparency and accountability in MNCs. Austria has implemented CbC reporting as part of its tax policy, requiring MNCs to file a CbC