Country-by-Country Reporting (CbCR)
Country-by-Country Reporting (CbCR) in the UAE
Country-by-Country Reporting requires the ultimate parent of a large multinational group to file an annual report showing, for every jurisdiction in which the group operates, its revenue, profit, tax paid, tax accrued, capital, employees and tangible assets. Tax authorities exchange these reports with each other and use them to decide where to look for transfer pricing risk.
For UAE-headquartered groups above the consolidated revenue threshold, Reflechir handles the whole cycle: confirming whether the obligation applies, filing the notification, collecting the data from every entity, preparing the report in the required format and reconciling it to the group’s transfer pricing documentation so the two tell the same story.
Who has to file in the UAE
- UAE ultimate parent entities: a UAE tax resident entity that is the ultimate parent of a multinational group whose consolidated revenue in the previous financial year exceeded the threshold set by the Ministry of Finance must file the CbC report in the UAE.
- Notification: in-scope UAE parent entities must notify the authority of their reporting status by the deadline set for the financial year, ahead of the report itself.
- UAE subsidiaries of foreign groups: these do not generally file in the UAE, because the report is filed by the foreign parent and exchanged, but they must be able to demonstrate where the group files and provide the report to the FTA on request in the context of transfer pricing.
- Interaction with corporate tax: the corporate tax return's transfer pricing disclosure, the master file and local file and the CbC report are cross-checked by the FTA. Inconsistent numbers across the three are the most common trigger for enquiries.
What the service covers
- Scope assessment: confirming whether the group meets the threshold on the correct consolidated basis, which entity is the ultimate parent, and whether any surrogate filing arrangement applies.
- Notification filing: preparing and submitting the annual CbCR notification with the correct entity details and reporting status.
- Data collection templates: a standardised pack sent to each entity's finance team to gather the required figures on a consistent basis, with definitions of revenue, related-party revenue, tax accrued and employees agreed up front.
- Report preparation: compiling Table 1 (jurisdiction data), Table 2 (entity list and activities) and Table 3 (explanations), converting to the XML schema accepted by the authority and validating before submission.
- Consistency review: reconciling the CbC report to the consolidated financial statements, the master file and local file, and the UAE corporate tax return, and documenting any differences.
- Risk read-across: a short memorandum on what the report signals to tax authorities (low-tax jurisdictions with high profit, entities with few staff and large revenue) so management can address the position before an enquiry arrives.
How the engagement works
CbCR is an annual, fixed-fee engagement timed to the group’s financial year. Reflechir issues the data request shortly after year end, compiles and reviews the report over the following weeks, and files well ahead of the deadline. First-year engagements include a scope assessment and the design of the data templates; subsequent years reuse them. Where the group also needs a master file and local file, the three deliverables are prepared together from one data set.
Why Reflechir
- Transfer pricing and CbCR from one team: the report is built to agree with the documentation that supports it, rather than prepared in isolation and reconciled later.
- Clean submissions: the XML is validated against the schema before filing, so it is not rejected at the portal.
- Explanations written for the reader: Table 3 is used to pre-empt the questions a foreign tax authority would otherwise raise.
If your group is headquartered in the UAE and approaching or above the CbCR threshold, contact Reflechir Consultancy to confirm your obligations and put the reporting cycle in place.