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A source-dated CbCR preparation guide covering scope, the three OECD tables, data ownership, reconciliation controls, XML and filing formats, common errors, Form 8975, and EU public CbCR.
Borys Ulanenko
CEO of ArmsLength AI
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A country-by-country report gives tax administrations an annual, jurisdiction-level view of an MNE group's revenue, profit or loss before income tax, cash tax, current tax accrued, stated capital, accumulated earnings, employees, tangible assets, Constituent Entities, and main activities.
The reliable way to prepare it is to treat CbCR as a controlled data product:
This guide explains the OECD framework and a practical control process. Domestic law controls the actual threshold in local currency, reporting entity, notifications, deadline, filing format, language, correction process, and penalties. Confirm every jurisdiction in the group's filing matrix for the relevant fiscal year.
The following source layer was checked on 16 August 2026:
| Topic | Source version used | What it governs |
|---|---|---|
| OECD model framework and tables | Action 13 Final Report, October 2015 | Model threshold, filing architecture, Tables 1-3, definitions, and model 12-month deadline |
| OECD interpretive guidance | May 2024 | Questions that arose during implementation, including data and filing interpretations |
| OECD common-error list | May 2025 | Errors observed by tax administrations and the stated correct treatment |
| OECD exchange schema | CbCR XML Schema and User Guide, version 2.0, June 2019 | Standardized government-to-government exchange format |
| Global implementation | OECD 2025 peer review, published September 2025 | Implementation status and peer-review findings |
| United States | IRS Form 8975 pages and December 2020 instructions, IRS pages reviewed in 2026 | US filing threshold, form, timing, and filing mechanics |
| EU public CbCR | Directive (EU) 2021/2101 and Implementing Regulation (EU) 2024/2952 | Separate public reporting regime and electronic format |
The OECD periodically updates its implementation guidance and common-error material. Local legislation can change independently of the OECD documents.
CbCR is part of the three-tier Action 13 documentation framework alongside the master file and local file. It gives tax administrations an early view of where the group reports income, taxes, people, capital, and assets.
Action 13 limits how the information should be used. A CbC report supports high-level transfer pricing and other BEPS risk assessment and, where appropriate, economic and statistical analysis. It does not replace a functional and comparability analysis of individual transactions. The report alone is not conclusive evidence that transfer prices are correct or incorrect and should not be used to impose a formulary allocation of income.
That distinction matters inside the group too. Ratios such as profit per employee or tax accrued divided by profit may reveal a question worth investigating. They do not answer the question without facts from the local file, accounts, agreements, tax provision, and business teams.
The Action 13 minimum standard uses annual consolidated group revenue of at least EUR 750 million in the immediately preceding fiscal year. Jurisdictions implement that standard through domestic law, often using a local-currency equivalent. Currency fluctuations, short periods, mergers, demergers, and the definition of revenue can affect the analysis.
Use the OECD threshold as the start of the scope review, not as the final legal conclusion.
For every reporting period:
The OECD model legislation sets a filing deadline no later than 12 months after the last day of the reporting fiscal year. That is not a universal taxpayer deadline. Domestic law may use a different mechanism or connect the filing to another return.
The IRS requires certain US persons that are the Ultimate Parent Entity of a US MNE group with USD 850 million or more of revenue in the preceding annual reporting period to file Form 8975 and Schedules A. The IRS instructions state that the form is filed with the Ultimate Parent Entity's income tax return for the tax year in or within which the CbCR reporting period ends; it is not a standalone filing.
Use the current IRS Form 8975 page and Form 8975 instructions for the filing period. The IRS currently lists the form and instructions as December 2020 revisions, while its CbCR guidance pages were reviewed in 2026.
The entity population is the spine of the report. Build it from the consolidation system and legal-entity register, then test it against tax and permanent-establishment records.
Under the Action 13 template, a Constituent Entity includes:
Permanent-establishment data belong in the jurisdiction where the permanent establishment is situated. The residence-jurisdiction row for the legal entity should exclude that permanent-establishment data.
| Control | Preparer evidence | Review question |
|---|---|---|
| Consolidated entities captured | Consolidation perimeter and change report | Is every consolidated business unit included? |
| Materiality exclusions captured | Consolidation eliminations and materiality list | Were entities omitted from consolidation solely for size or materiality added back? |
| Permanent establishments captured | Tax register and branch ledger list | Does every qualifying permanent establishment have a separate Table 2 entry and correctly attributed data? |
| Residence determined | Tax-residence file and adviser confirmations | Is residence based on the relevant tax rule rather than incorporation alone? |
| Changes explained | Acquisition, disposal, merger, and liquidation log | Do opening and closing populations reconcile, including effective dates? |
| Table consistency checked | Automated Table 1/Table 2 comparison | Does every jurisdiction in Table 1 appear in Table 2 and vice versa? |
Do not use the prior-year population as the sole source. Roll it forward against live legal and consolidation records.
Table 1 aggregates these fields for each tax jurisdiction:
| Field | Preparation question |
|---|---|
| Unrelated-party revenue | Which accounts and counterparties meet the reporting definition? |
| Related-party revenue | Is the counterparty a Constituent Entity, and are classifications consistent across systems? |
| Total revenue | Does it equal unrelated-party plus related-party revenue? |
| Profit or loss before income tax | Are the source and treatment of dividends from Constituent Entities consistent with current OECD guidance? |
| Income tax paid on a cash basis | Are refunds and payments captured in the correct period and jurisdiction? |
| Income tax accrued for the current year | Is this current tax only, excluding deferred tax and provisions for uncertain liabilities? |
| Stated capital | Is the amount aggregated without duplicating permanent-establishment data? |
| Accumulated earnings | Is the source definition applied consistently? |
| Number of employees | Is the group using full-time equivalents, year-end headcount, or another permitted consistent approach? |
| Tangible assets other than cash and cash equivalents | Are net book values used, with cash, intangibles, and financial assets excluded? |
The Action 13 instructions allow the reporting group to use consolidation packages, separate-entity statutory accounts, regulatory accounts, or internal management accounts. Use the same source consistently from year to year and explain the source in Table 3.
Intercompany dividends: For reporting fiscal years beginning on or after 1 January 2025, the OECD's May 2024 implementation guidance excludes qualifying dividends received from another Constituent Entity from both Revenue and Profit (Loss) before Income Tax. Related cash and current-tax amounts must be treated consistently under that guidance. Confirm how the rule is implemented in the filing jurisdiction and period before finalizing the mapping.
If statutory accounts supply figures, translate them to the stated functional currency of the reporting MNE using the average exchange rate for the year and disclose the rate in Table 3. Use one currency throughout Table 1.
List every Constituent Entity by tax jurisdiction of residence, its jurisdiction of organization or incorporation if different, and all applicable main business activities. If "Other" is selected, describe the activity in Table 3.
Names, tax identification numbers, residence, incorporation, and activity codes should come from controlled reference data rather than free-text re-entry. Preserve the name and identifier used in the local filing system.
Table 3 is part of the report, not a notes page to complete at the end. Use it to disclose:
Keep explanations factual. A long narrative does not cure an incorrect number.
Assign one owner and one reviewer to every source and transformation before collection begins.
| Data block | Typical owner | Core evidence | Primary control |
|---|---|---|---|
| Entity population and residence | Legal or tax operations | Legal-entity register, consolidation perimeter, PE register | Population bridge and jurisdiction mapping |
| Revenue and profit | Group reporting or controllership | Consolidation packages, ledgers, account mapping | Trial-balance-to-CbCR bridge and column arithmetic |
| Cash tax and current tax accrued | Tax accounting | Tax provision, payment records, returns | Cash/accrual distinction and jurisdiction tie-out |
| Capital and accumulated earnings | Group reporting | Consolidation and statutory equity records | Definition and aggregation check |
| Employees | HR data owner | HR system extract and contractor policy | Counting method, date or averaging rule, and jurisdiction mapping |
| Tangible assets | Fixed-asset or group reporting owner | Fixed-asset register and balance sheet | Net book value and excluded-asset check |
| Table 2 identifiers and activities | Tax operations | Legal register, TIN records, business-owner confirmation | Duplicate, missing, and invalid identifier checks |
| Filing output | Tax technology or compliance | Approved final tables and local schema | Schema validation and hash/version record |
For each field, record:
A spreadsheet heading such as "tax" is not a definition. Separate cash tax, current tax accrued, deferred tax, withholding tax, refunds, and uncertain tax positions in the source mapping before selecting what belongs in the report.
Action 13 permits specified source data and says that revenue, profit, and tax figures do not have to reconcile to the consolidated financial statements. That is a reporting rule, not a reason to skip controls. A documented bridge helps the preparer prove completeness, find duplicate or omitted data, and explain why the CbCR basis differs from consolidation.
| Reconciliation | Minimum check | Evidence retained |
|---|---|---|
| Entity population | Opening entities + additions - removals = closing population | Signed population bridge |
| Jurisdiction population | Every Table 1 jurisdiction has at least one Table 2 entity and every Table 2 jurisdiction has a Table 1 row | Exception-free comparison report |
| Revenue | Unrelated + related = total for every jurisdiction | Automated arithmetic output |
| Financial source | CbCR source totals bridge to the selected consolidation, statutory, regulatory, or management source | Mapping and reconciling-item schedule |
| Currency | Every local amount converts into the single reporting currency using the approved method | Rate source and re-performance |
| Tax | Cash tax and current tax accrued tie to their separate source records | Tax-payment and provision bridges |
| Employees | Jurisdiction totals tie to the approved HR extract after documented adjustments | HR population bridge |
| Tangible assets | Included net book values tie to the fixed-asset source after exclusions | Asset-class mapping |
| Year-on-year movement | Material changes have a business or source explanation | Variance report and owner response |
| Cross-document story | Material CbCR facts do not conflict without explanation with the master file, local files, statutory accounts, or tax provision | Review checklist and sign-off |
Do not set one percentage threshold for every field. A small movement in one jurisdiction may matter more than a large, well-understood movement elsewhere. Review at least:
The owner should resolve the source data or provide a clear Table 3 explanation where the reported result is correct.
The OECD's May 2025 common-error document lists issues found in filed reports. Convert those observations into pre-filing tests:
| OECD-observed error | Pre-filing test |
|---|---|
Missing, blank, repeated, or inappropriate NOTIN tax identification numbers | Validate each identifier against the entity master and local format; use NOTIN only where no TIN has been issued |
| More than one currency in Table 1 | Confirm one reporting currency and reperform conversion |
| Shortened figures, decimals, or excessive rounding | Produce full monetary amounts without decimals under the OECD format and apply only locally permitted rounding |
| Figures transposed between columns | Apply data-type and reasonableness checks to employees, tax, assets, and revenue |
| Total revenue does not equal related plus unrelated revenue | Run an exact row-level arithmetic validation |
| Qualifying dividends from Constituent Entities included in revenue or profit, or related tax treated inconsistently | Test the revenue, profit, cash-tax, and current-tax mappings against the May 2024 guidance for the applicable reporting period |
| Data sources or exchange rates omitted from Table 3 | Make both fields mandatory in the sign-off checklist |
| Table 1 and Table 2 contain different jurisdictions | Compare the two jurisdiction sets automatically |
| Materiality-excluded entities or permanent establishments omitted | Reconcile to consolidation exclusions and the PE register |
| "Other" activity selected without explanation | Require Table 3 text before finalization |
| Incorrect reporting-period end date | Validate against the reporting MNE's fiscal-year end, not the submission date |
| Correction submitted without the proper correction references | Follow the current local correction process and preserve links to the original filing |
| Invalid XML characters | Validate and escape content through the approved schema tool rather than editing XML manually |
The OECD document says errors should be corrected when identified. The form, timing, and technical method for a taxpayer correction still depend on the receiving jurisdiction.
The OECD currently lists the CbCR XML Schema and User Guide version 2.0, published June 2019, as the standardized format for exchange of CbC reports between jurisdictions. The related Status Message XML Schema lets receiving administrations send structured feedback about errors.
The exchange standard is not automatically the format a taxpayer uploads. Jurisdictions may provide a portal, spreadsheet, PDF form, local XML schema, or tax-return attachment and then convert the filing for exchange.
The IRS says US taxpayers filing electronically use an IRS-approved XML schema compatible with the Modernized e-File system for Form 8975 and Schedules A. This is part of the income-tax return filing, not a direct upload of the OECD exchange file.
Schema-valid does not mean tax-valid. Technical validation can confirm formats and relationships, but it cannot decide whether the entity population, residence, source data, or tax treatment is correct.
Under the OECD architecture, the Ultimate Parent Entity generally files in its residence jurisdiction and the report is exchanged government to government with jurisdictions where the group operates and an exchange relationship is effective. A Surrogate Parent Entity may file on the group's behalf under the relevant conditions. Secondary or local filing is a backup mechanism in limited circumstances.
Local notification obligations are separate from the report itself. A Constituent Entity may need to identify the Reporting Entity and its residence before the CbCR filing deadline. Build notifications into the same filing matrix and do not infer their deadline from the model 12-month report deadline.
Before filing, verify:
The OECD CbCR portal links to implementation guidance and exchange information. Domestic tax-authority sources remain controlling for taxpayer obligations.
EU public country-by-country reporting under Directive (EU) 2021/2101 is different from confidential tax CbCR. The public regime requires qualifying EU and non-EU multinational groups with significant EU activity to publish specified income-tax information.
The directive applies a EUR 750 million consolidated-revenue test over two consecutive financial years, subject to its detailed scope and exemptions. Member States had to apply the reporting requirements, at the latest, for financial years starting on or after 22 June 2024.
Commission Implementing Regulation (EU) 2024/2952 establishes the common template and requires XHTML with Inline XBRL markup for reports within its scope. Its template and electronic-format rules apply to financial years starting on or after 1 January 2025.
| Confidential tax CbCR | EU public CbCR |
|---|---|
| Filed with a tax administration and exchanged under legal instruments | Published and made accessible to the public |
| OECD Action 13 template and domestic tax law | EU Accounting Directive as amended and Member State implementation |
| Jurisdiction aggregation follows the tax-reporting framework | Publication breakdown follows the EU public-reporting rules |
| OECD XML supports government exchange; local taxpayer formats vary | Implementing Regulation 2024/2952 provides the common XHTML/iXBRL format for reports in scope |
| Used for high-level tax risk assessment and related permitted purposes | Designed for public corporate income-tax transparency |
Do not publish the confidential tax CbC report as a shortcut. Map the public-reporting definitions, scope, breakdown, content, format, approval, and publication process separately. See the EU public CbCR guide for the dedicated workflow.
The same systems may feed the CbC report, master file, local files, and Pillar Two calculations, but their definitions are not interchangeable.
Run a consistency review across:
The OECD's Pillar Two transitional CbCR safe harbour has its own qualifying-report and data requirements. A technically correct Action 13 CbC report does not automatically satisfy them. Use the Pillar Two CbCR guide and the current OECD Pillar Two materials for that separate analysis.
The Action 13 minimum standard uses consolidated group revenue of at least EUR 750 million in the immediately preceding fiscal year. Domestic law determines the operative local-currency threshold, revenue definition, filing entity, and exceptions.
No. Twelve months is the deadline in the OECD model legislation. Local law controls. For example, US Form 8975 is filed with the Ultimate Parent Entity's income tax return for the tax year in or within which the reporting period ends.
The Action 13 instructions permit several source types and state that revenue, profit, and tax figures do not have to reconcile to consolidated financial statements. A controlled bridge to the chosen source is still a sound completeness and review control, particularly when the CbCR basis differs from consolidation.
The Action 13 instructions permit year-end numbers, an average for the year, or another consistently applied basis. Independent contractors participating in ordinary operating activities may be reported. Document the method, apply it consistently across jurisdictions and years, and avoid materially distorting the relative distribution.
Report the aggregate net book value of tangible assets in the relevant jurisdiction. The Action 13 instructions exclude cash and cash equivalents, intangibles, and financial assets. Attribute permanent-establishment assets to the jurisdiction where the permanent establishment is situated.
The OECD currently lists version 2.0, published in June 2019, for government-to-government exchange. Confirm the taxpayer filing format separately with the relevant tax administration.
Under Action 13, the CbC report should not replace a detailed functional and comparability analysis, does not by itself prove that transfer prices are right or wrong, and should not be used for formulary apportionment adjustments.
No. EU public CbCR is a public-reporting regime under the Accounting Directive framework. It has its own scope, breakdown, content, publication, and electronic-format rules. Prepare it as a separate controlled output.