The Multinational Entities Financial Reporting Act, 2018 (MNE Act) came into force on January 1, 2018, in The Bahamas. This legislation was enacted in response to the OECD’s Base Erosion and Profit Shifting (BEPS) initiative and the European Union’s guidance on fair taxation.

Key aspects of the MNE Act include:

1. Reporting Obligation: The ultimate parent entity of a Multinational Entities (MNE) Group resident in The Bahamas must file a country-by-country report with the Minister of Finance.
2. Threshold: The Act applies to MNE Groups with consolidated revenues of at least US$850 million in the fiscal year preceding the reporting year.
3. Filing Deadline: The report must be filed within 12 months after the last day of the reporting fiscal year.
4. Report Contents: The country-by-country report must include:
   • Aggregate financial information for each jurisdiction where the MNE Group operates, including revenue, profit/loss, income tax paid and accrued, stated capital, accumulated earnings, number of employees, and tangible assets.
   • Identification of each constituent entity, its tax residence, jurisdiction of organization, and main business activities.
5. Notification Requirement: Constituent entities resident in The Bahamas must notify the Authority whether they are the ultimate parent entity or surrogate parent entity.
6. Compliance: Failure to comply with the Act’s provisions or providing inaccurate information may result in penalties.

The MNE Act is part of The Bahamas’ efforts to align with international tax transparency standards and combat tax avoidance strategies employed by large multinational corporations.