Base Erosion Profit Shifting (BEPS) is a term used to describe tax planning strategies that rely on mismatches and gaps that exist between the tax rules of different jurisdictions, to minimize the corporation tax that is payable overall, by either making tax profits “disappear” or shift profits to low tax operations where there is little or no genuine activity.
As a result of the BEPS initiative, particularly the data-intensive country-by-country reporting requirements, global companies are taking action by centralizing transfer pricing data and automating how it is used to meet new international tax regulations.
In response to this requirement, a three-tiered standardized approach to transfer pricing documentation has been developed, including the requirement for MNEs with annual consolidated group revenue equal or exceeding EUR 750 million (or an approximately equivalent amount in domestic currency) to file a Country-by-Country (CbC) Report that will provide annually and for each Tax Jurisdiction in which they do business the amount of revenue, profit before income tax and income tax paid and accrued.
It also requires MNEs to report their number of employees, stated capital, accumulated earnings and tangible assets in each Tax Jurisdiction. Finally, it requires MNEs to identify each entity within the group doing business in a particular Tax Jurisdiction and to provide an indication of the business activities each Constituent Entity engages in.
How can InfrasoftTech help firms with a BEPS solution?
InfrasoftTech’s Country by Country solution is a part of our ‘RegTech’ offering, designed to simplify the tax compliance process and remove the burden of formulating and implementing new compliance policies. It provides customers with a secure place to capture, collect and generate Country by Country reports required under BEPS regulations ensuring on time compliance with reporting mandates. It also streamlines operational procedures and reduces resource requirements, saving time and money.
In line with our current aspiration of expanding the existing FRS product into an expanding RegTech Suite, InfrasoftTech has developed a “Country by Country Reporting solution” to help companies comply with this regulatory requirement.
It helps clients by sponsoring the reporting for multiple MNEs spread across the globe using the BEPS solution, resulting in an ability to earn revenue.
Country by Country Reporting Solution is a robust enterprise scale solution built on open and flexible metadata based architecture, which seamlessly aggregates the data available in the clients’ systems and maps them according to BEPS specifications, enabling an aggregation of data into XML or CSV specific formats.
It has capability to cater for multiple jurisdictions on the same platform instance, which can be hosted on a cloud or on premise model. It can also be integrated with FRS or can be used as a separate single application.
The data can be imported from multiple file formats with custom validation, which can be reviewed on attractive analytical dashboards and posted based on authorization workflows.
The entire process of data import and XML output generation adheres to security standards with audit trail records.
It is supported by rapid deployment and quick resolution of queries and in addition it also supports the current and future year reporting requirements leading to zero maintenance headache.
The product is continuously being enhanced, hence updated versions are delivered by insulating against all changes required by any of the regulatory bodies.
The easy to use system with a small footprint results in reduced operating costs.
Country by Country Reporting Solution Features
- Automation of administrative process
- Data extraction from existing source systems
- Bulk upload capability of reporting of data with validation routines to check for data integrity
- Provide comprehensive data reporting
- Built-in review and authorization workflows
- Dynamic dashboards providing single view capabilities
- On-going schema updates
- Verification of business validations & checkpoints
- Multi-Tenant / Multi-entity solution to meet your reporting requirements
- Single Click submission capability to various jurisdiction
Business benefits gained from Country by Country Reporting solution
- Provide Country by Country compliance to regulatory authorities
- Reliable partner for regulatory processes
- Seamless integration with FRS product suite
- Ability to review and authorize data
- Automatic submission of data on a single click
- Reporting capability for online & offline analysis