Are you aware of the December 31st Country-by-Country Reporting (“CbC Reporting”) deadlines?
In this newsletter, Grant Thornton would like to draw your attention to the main features and deadlines regarding the CbC Reporting regulations in Luxembourg as 2022 is drawing to a close. This is important as the close of 2022 will bring with it the deadlines for various CbC Reporting obligations for many Luxembourg companies.
A. Who is Falling Within the Scope of Country-by-Country Reporting?
Any Luxembourg tax-resident entity must file a CbC Notification (and a CbC Report, depending on whether it is the (designated) reporting entity) where it meets the following conditions:
1. The entity forms part of a multi-national group “MNE Group”, and;
2. The MNE Group’s consolidated global turnover exceed EUR 750 million (or its equivalent in another currency) during the fiscal year immediately preceding the current fiscal year.
B. What Should be Reported?
The CbC Reporting obligations relate to two separate filings, namely the CbC Report and the CbC Notification.
1. The CbC Report – provides aggregate financial data on a jurisdiction-wide basis related to income, taxes paid and other indicators of economic activity in each jurisdiction.
2. The CbC Notification – provides general details pertaining to each individual constituent entity in the MNE Group.
It should also be noted that the Organization for Economic Co-operation and Development (“OECD”) regularly update both substantive and procedural guidance on CbC Reporting. For 2022, these updates include guidance on atypical accounting periods, reporting for permanent establishments and the reporting of negative financial figures. These changes are reflected in the latest OECD CbCR implementation guide, available here. Similarly, the Luxembourgish state also periodically updates reporting requirements.
C. Procedure and Deadlines
Both the CbC Report and the CbC Notifications must be submitted online and have separate filing procedures.
The CbC Notifications must be submitted annually no later than the last day of the reporting fiscal year for the MNE group. The CbC Report must be submitted no later than 12 months after the final day of the reporting fiscal year for the MNE group. Consequently, for Luxembourg companies with an accounting period from January 1, 2022 to December 31, 2022, the statutory submission deadline is December 31, 2022.
Non-compliance with the CbC Reporting rules can come in many forms but generally represent absent, incomplete or inaccurate filings of CbC Notifications or CbC Reports. There is currently limited public guidance provided on how penalties are calculated and dispensed but they may be up to EUR 250,000.
Grant Thornton can assist you with every step of both the CbC Notification and CbC Report, including submission on your behalf.
If you have any questions about the CbC Reporting in Luxembourg, we encourage you to get in touch.
For more information, please contact:
- Jean-Nicolas Bourtembourg - Partner, Head of Tax & Transfer Princing