The Base Erosion and Profit Shifting (BEPS) Inclusive Framework (Country-by-Country) Reporting Bill, 2023 was passed in the Senate on Tuesday.
Finance Minister Colm Imbert said the bill was part of government’s initiative to assist with compliance with one criteria of the list of non-co-operative jurisdictions for tax purposes of the European Union.
The bill’s full title is An Act to provide for the Country-by-Country Reporting (CBCR) by Multinational entities relative to the Base Erosion and Profit Shifting Inclusive Framework and to provide for matters related thereto.
BEPS refers to the action whereby multi-national enterprises (MNEs) register their companies in countries with low taxes in order to avoid paying taxes in countries with higher taxes where they earn their money. Country to country reporting enables governments to track what taxes MNEs are paying and where, as the enterprises are required to submit reports to the governments.
Imbert said he would be circulating amendments based on comments from the Organisation for Economic Co-operation and Development (OECD) which had changed from the last time TT had undergone a review by the OECD, which he described as shifting goalposts.
“Once our network is in place, we will be recipients of information on the multi-national corporations that operate in TT, and this will help us determine if any of them are evading taxation.”
He said in March, the OECD’s global forum secretariat would be in TT to conduct an on-site mock peer review visit, following which government would be notified of its shortcomings and be given recommendations by the end of May, which they hoped to implement before the actual official Phase 2 peer review in June of 2024, with the results being received in September 2024. He expected to be compliant or largely compliant by December 2024.
The bill has 22 clauses, which lay out the filing and notification obligations of MNEs to the Board of Inland Revenue (BIR), the definition of an eligible MNE, the time frame for filing, the details of what the reports should contain, and the provision that the information gathered can be used for compliance and enforcement but should be kept confidential.
The bill requires that MNEs keep records for six years. It said the registrar general’s department would use the information given to determine whether enterprises were registered in TT for tax purposes, and to submit the list of registered companies to the BIR every six months.
The bill details the penalties and procedures for dealing with errors, fake reports, hindering or obstructing the BIR in collecting information, and altering, destroying, mutilating, obliterating, hiding or removing a country-by-country report.
The Finance Minister said an eligible MNE was one which earned more than the equivalent of US$850 million or 750 million Euros.
Imbert said the bill will help with TT’s investment rating and its relationship with foreign banks.
“We will impose penalties for those MNEs in our society which are not in compliance. Thes
