Country by Country Reporting – CbCR – UAE 2019
Introduction
In April 2019, the UAE Ministry of Finance in its Official Gazette published the Cabinet Resolution No. 32 of 2019 on Country-by-Country Reporting (‘CbCR Resolution’). The CbCR rules notified vide the CbCR Resolution are in line with the guidance issued by the Organization for Economic Cooperation and Development (‘OECD’) in this regard.
The CbCR rules case responsibility on applicable entities for filing of CbCR or filing of notifications as may be required.
Failure to comply with the CbCR rules would expose the non-compliant UAE taxpayer to stringent and varying levels of administrative penalties.
Applicability
The CbCR requirements are applicable to financial reporting years commencing on or after 1st January 2019.
The requirement to comply with the CbCR Rule would be applicable for entities that are:
– tax resident in the UAE, and
– are part of a multinational group with consolidated revenues equal to or exceeding UAE Dirhams (‘AED’) 3.15 billion (~ EUR 764 million or USD 858 million) in the preceding financial year.
Compliance requirement
| Entity being a UPE[1] and a tax resident in the UAE | CbCR to be filed within 12 months from the end of Group Financial Year |
| Entity (other than a UPE) being tax resident in the UAE | CbCR notification to be filed by the end of Group Financial Year |
| CbCR filing would be required in case certain prescribed conditions are fulfilled |
Compliance Format
| CbCR | Aligned with the format put forth by the OECD for Tables 1, 2 and 3 respectively |
| Notifications | As prescribed |
Notifications to be filed
| Who | What | When |
| UPE/Surrogate Parent Entity | Fact of it being UPE/Surrogate Parent Entity | By last day of the reporting fiscal year of the MNE Group |
| Entity (other than a UPE) being tax resident in the UAE | Identity and tax residence of the reporting entity | By last day of the reporting fiscal year of the MNE Group |
* For Multinational Enterprise Group financial reporting years starting on 1 January 2019, notifications are to be filed by 31 December 2019
Administrative penalties
| S. No. | Particulars | Penalty amount (AED) |
| a | Failure to keep the required documents/information for a minimum period of 5 years from the date of filing CbCR | 100,000 |
| b | Failure to provide information required in accordance with the CbCR and notification requirements | 100,000 |
| c | Failure to report the information required on the reporting date fixed, or in case of failure to notify the Competent Authority, on or prior to the date fixed for reporting, of the intention to submit the CbCR with respect to a particular accounting period | 1,000,000
(plus 10,000 for each day of failure up to a maximum of 250,000) |
| d | Failure to report full and accurate information | Minimum 50,000
Maximum 500,000 |
* Except for the additional penalty under (c), the total penalties for any violations of the regulations in any reporting fiscal year shall not exceed AED 1,000,000.
[1] Ultimate Parent Entity