8. What is a CbC Report?
A report including quantitative and qualitative information about the MNE Group. Information such
as revenues, profits, employees count, business description, etc. should be reported under three
tables:
- • Table I – This contains the quantitative information per tax jurisdiction such as third
party and related party revenues, stated capital, taxes accrued and paid, employee count,
etc.
- • Table II – This contains the qualitative information per constituent entity on the main
business activities undertaken during the year.
- • Table III – This contains any additional information necessary to facilitate the
understanding of Tables I and II (e.g. assumptions on exchange rates, source of data, etc.)
9. Which groups of companies will be required to comply with CbC Reporting Legislation in the
UAE?
UAE-headquartered Groups of companies which meet the following criteria should comply with CbC
Reporting legislation in the UAE:
- ● MNE Groups i.e. Groups which consist of two or more enterprises that are residents for tax
purposes in different jurisdictions (an enterprise that is resident for tax purposes in one
jurisdiction and has a taxable permanent establishment in another jurisdiction should be
considered as a separate enterprise in the context of this definition); and
- ● Have a total consolidated revenue that is equal to or more than AED 3,150,000,000 for the
financial year preceding the reporting year concerned.
ILLUSTRATION For the MNE Group’s CbCR threshold assessment for the reporting year ending by
December 31st, 2019 (Y) a check should be done on the MNE Groups’ consolidated revenues for the
financial year ended per December 31st 2018 (Y-1)
Case 1: an MNE Group had a consolidated revenue of AED 3,500,000,000 during the financial year
ending December 31st, 2018. In this case, for the CbCR reporting year 2019, the MNE Group meets
the CbCR revenue threshold and will need to comply with CbC Reporting legislation in the UAE for
the reporting year 2019.
Case 2: an MNE Group had a consolidated revenue of AED 3,000,000,000 during the financial year
ending December 31st, 2018. In this case, for the CbCR reporting year 2019, the MNE Group does
not meet the CbCR revenue threshold and does not need to comply with CbC Reporting legislation
in the UAE for the reporting year 2019.
10. When do the CbC Reporting requirements come into effect in the UAE?
CbC Reporting requirements come into effect for financial years starting on or after January 1st
2019.
11. When must a CbC Report be filed with the UAE?
The CbC report should be filed within 12 months from the end of the reporting year of the MNE
Group. E.g. With respect to the financial year commencing on January 1st 2019 and ending by
December 31st 2019, the CbC Report should be filed no later than December 31, 2020.
12. Which entity within the MNE Group should be primarily responsible for filing the CbC Report
in the UAE?
The UAE tax resident entity, which is an Ultimate Parent Entity of the MNE Group subject to the
CbC Reporting Legislation as clarified under question 9 above.
13. Who should be considered as a ‘UAE tax resident entity’ for CbCR purposes?
Based on the existing UAE laws and international tax treaties, an entity should be considered as
a tax resident in the UAE if it is incorporated or created under the laws of UAE or has its
place of effective management therein.
14. What sources of information should be used for preparation of the CbC report?
The entity filing the CbC Report should consistently use the same sources of data from year to
year in completing the CbC Report. The data can be obtained from the following sources:
- ● Consolidation reporting packages; or
-
● Separate entity statutory financial statements; or
- ● Regulatory financial statements; or
- ● Internal management accounts.
The entity preparing the CbC Report should provide a brief description of the sources of data
used and explain reasons for any changes in sources of information from year to year in the
Additional Information section (Table III) of the CbC Report.
15. Is there any specific guidance on how to complete the CbC Report?
please see the links above
16. How should the CbC Report be filed?
please see the links above
17. What currency should be used for CbC Reporting purposes?
If separate entity statutory financial statements are used as the basis for reporting, all
amounts should be translated to the stated functional currency of the MNE Group. The average
exchange rates for the year should be used for currency conversion. The applied rates should be
stated in the Additional Information section (Table III) of the CbC Report.
18. In which language should the CbC Report be submitted in the UAE?
The CbC Report should be submitted in English.
19. How should information on permanent establishments (including branches) be reflected in the
CbC Report?
Permanent establishment data should be reported by reference to the tax jurisdiction in which the
permanent establishment is situated and not by reference to the tax jurisdiction of residence of
the entity of which it is a permanent establishment. Information reported by reference to the
residence tax jurisdiction of the entity of which it is a permanent establishment should exclude
financial data related to the permanent establishment.
Example: The UAE entity has a branch in the UK, The CbC Report should reflect
revenue, profit and other indicators of the branch as related to the UK. Data for the UAE entity
should be presented after exclusion of information related to the UK branch.