handbook-tb

Transparency and disclosureobservations — the potential for flexibility in sharing different businessline information with different countries; and the concern that countrieswould be unable to ascertain that the MNE had fully reportedall income and activities. It has been emphasized that the master fileinformation is intended to provide a high-level risk overview andshould be used consistent with that function (and, for example, shouldnot replace actual audits and more detailed taxpayer-specific analysisand inquiry).3.3.3.2 Country-by-country templateThe CbC template is expected to require taxpayer reporting on the followingseven items: (a) revenue; (b) earnings before taxes; (c) cash tax;(d) current year tax accruals; (e) stated capital and accumulated earnings;(f) number of employees; and (g) tangible assets. 22 This informationwould be provided on a country-by-country basis (as opposed toentity-by-entity).The template would be accompanied by a list of all group entitiesand permanent establishments (PEs), by country, along with businessactivity codes identifying their major activities. Taxpayers wouldhave the flexibility to use either statutory account data or financialstatement reporting packages to complete the template — if data usageis applied consistently across the group and across years. Informationcontained in the CbC template would provide tax authorities with aclearer picture of the relationship between reported profits, taxes paidand the underlying details of economic activity (for example, tangibleassets, employees, employee expense).Several questions pertaining specifically to the CbC templatehave been raised:22The reporting items were reduced to 7, from an original suggested 17in the January 2014 Discussion Draft, following extensive taxpayer comments.See, for example, Kevin A. Bell, “Country-by-Country TemplateWon’t Require Entity-by-Entity Financial Details, Andrus Says,” BNA TransferPricing Report (10 April 2014), available at http://www.bna.com/countrybycountry-template-wont-n17179889500/;see also OECD Update on BEPSProject — Webcast Powerpoint (2 April 2014), available at http://www.oecd.org/ctp/OECD-BEPS-Webcast-2April.pdf.513