During June 2016, the Irish Revenue Commissioners ("Irish Revenue") published guidance on the secondary reporting mechanism included in Ireland's legislation implementing the OECD's recommendations on country by country ("CbC") reporting. While the legislation primarily provides for the filing of CbC reports by Irish headquartered multinationals, in certain circumstances, multinationals operating in Ireland that are headquartered elsewhere are required to make CbC filings in Ireland.

The secondary reporting mechanism is particularly relevant for multinational groups headquartered in jurisdictions that have not implemented CbC reporting for financial years beginning on or after 1 January 2016 (eg the US) and have Irish operations.

Ireland's secondary reporting mechanism

Under the Taxes (Country-by Country Reporting) Regulations 2015 (the "Regulations"), multinationals operating in Ireland that are headquartered elsewhere are obliged to file an 'equivalent CbC report' if:

  • the multinational group is not required to file a CbC report in its headquarter jurisdiction and the group has not appointed a surrogate parent to file a CbC report elsewhere;
  • the CbC report that has been filed in the headquarter jurisdiction (or, as the case may be, the surrogate parent jurisdiction) will not be provided to Irish Revenue as no exchange of information arrangements have been agreed by Ireland with that jurisdiction; or
  • there is systemic failure in the headquarter jurisdiction (or, as the case may be, the surrogate parent jurisdiction) in respect of its obligations under exchange of information arrangements agreed with Ireland.

As noted in the guidance issued by the Irish Revenue, Ireland's secondary reporting mechanism differs from the recommendations made by the OECD under Action 13 of the base erosion and profit shifting ("BEPS") project. The report issued under Action 13 anticipated that full CbC reports would be filed under the secondary reporting mechanism, whereas, the Irish rules require an 'equivalent CbC report'. Irish Revenue explain that the reason for the difference in approach is that an entity in a multinational group that is neither the headquarter company nor a surrogate parent "may be limited in its capacity to provide a complete CbC Report with information for the full MNE Group."

Equivalent CbC Report

An equivalent CbC report must include the same information as should be included in a CbC report but only to the extent that:

  • the information is within the custody or possession of the Irish entity; or
  • the Irish entity has the power to obtain that information.

In the guidance, Irish Revenue confirm that they expect that equivalent CbC reports "will include inter alia information relating to the Irish tax resident constituent entity and its subsidiaries." Outside of that, Irish Revenue consider that the Irish entity "is best placed to determine what information it can provide" in the equivalent CbC report. Irish Revenue expect that those filing equivalent CbC reports will take a "reasonable, practical and consistent approach" to their obligations under the Regulations noting that the onus is on the taxpayer to ensure that the equivalent CbC report is complete and accurate.

The guidance also confirms that the penalty for failure to file an equivalent CbC report is €19,045 plus a daily fine for each day the failure continues (almost €1 million annually). The penalty for filing an incomplete or inaccurate equivalent CbC report is €19,045.

Exchange of equivalent CbC reports

Interestingly, the guidance confirms that as the requirement to file an equivalent CbC report is a local filing requirement only, Irish Revenue is not required to exchange those reports with other tax authorities.


The Regulations will apply for financial years beginning on or after 1 January 2016. An equivalent CbC report must be filed within 12 months of the end of the financial year to which it relates (ie equivalent CbC reports in respect of financial years commencing on 1 January 2016 must be filed by 31 December 2017).

This article first was first published in International Tax Review on 12 July 2016.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.