Country-by-Country Reporting (CbCR)is the requirement of the Organization for Economic Co-operation and Development (OECD) through its Action 13 of Base Erosion and Profit Shifting (BEPS). It is initially introduced in the United Arab Emirates (UAE) with effect from the year 2019 through Cabinet Resolution No. 32 of 2019, which is now replaced by Cabinet Resolution No. 44 of 2020 and will be in effect.
As per Country-by-Country Reporting in UAE(CbCR) regulation, large Multinational Groups of Enterprises (MNEs) in UAE have to file a CbC report to the Competent Authorities at the end of every Financial year. It should provide details of the amount of revenue, profit/(loss) before tax, income tax accrued, income tax paid, Tax residence of Constituent Company, etc. for each such Company of MNE Group where MNE carries out its activities.
As per Cabinet Resolution No 44 of 2020, Country by Country Reporting in UAE (CbCR) requirements will be applicable to you if the following two conditions are met:
Country by Country Reporting UAE | CbCR Reporting UAE
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UAE entities to whom the Regulation is applicable need to comply with Notification & Reporting as below:
Each Ultimate Parent Entity of the MNE Group whose tax residence is in the UAE shall notify the Competent Authority that it is the Reporting Entity, no later than the last day of the Group’s Reporting Fiscal Year.
If CbCR (Country by Country Reporting) notification is not submitted within the due date by Ultimate Parent Entity, the administrative penalty will be charged AED 1,000,000/-. In addition to that administrative penalty of AED 10,000/-per day for which the failure continues (maximum up to 250,000/-).
It is applicable to each such Reporting Entity in the UAE for the current financial year. Such a UAE company should submit the CbC Report to the MOF within 12 months from the end of the current financial year.
The report shall include the following elements:
If CBC Report is not submitted within the due date, the administrative penalty will be charged AED 1,000,000/-. In addition to that administrative penalty amounting to AED 10,000/-per day for which the failure continues (maximum up to 250,000/-) also will be charged.
In case where Reporting Entity fails to maintain the documents and information required under this Resolution for a minimum period of five (5) years after the date of reporting the Report to the Competent Authority, an administrative penalty of UAE Dirhams One Hundred Thousand (AED 100,000) shall be imposed.
On failure to provide the required information to the Competent authority, an administrative penalty of UAE Dirhams One Hundred Thousand (AED 100,000) shall be imposed. An administrative Penalty of minimum UAE Dirhams Fifty Thousand (AED 50,000) to maximum of Five Hundred thousand (AED 500,000) shall be imposed in case of providing inaccurate or incomplete information by the Reporting Entity.