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How CbCR Helps with Finding Risks and Being Transparent

Country-by-Country Reporting (CbCR) helps multinational enterprises identify tax risks and maintain transparency by revealing how profits, revenues, and taxes are distributed across jurisdictions. It enables tax authorities to detect mismatches between economic activity and profit allocation, improving transfer pricing audits and compliance. SKMC Global supports businesses with CbCR preparation, documentation, and regulatory alignment, ensuring accurate disclosures and smooth compliance under OECD and Indian tax norms.

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How CbCR Helps with Finding Risks and Being Transparent

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  1. How CbCR Helps with Finding Risks and Being Transparent? Country-by-Country Reporting (CbCR) helps multinational enterprises identify potential tax and compliance risks by providing a clear view of profits, revenues, and taxes paid across jurisdictions. It enhances transparency for tax authorities, enabling better risk assessment and ensuring fair, responsible global tax practices. CbCR provides tax authorities with a holistic view of a multinational enterprise’s (MNE’s) global operations and profit allocation. It links real economic activity with profit distribution, exposing inconsistencies often hidden in traditional reports. Example: If an Indian subsidiary conducts key R&D but reports low profits while a low-tax affiliate reports high profits, CbCR highlights the mismatch. Such insights help authorities identify cases for transfer pricing audits under Sections 92C and 92CA of the Income-tax Act, 1961. According to the OECD, CbCR enhances effective risk assessment and enables efficient use of audit resources. Auditors can now focus on high-risk taxpayers instead of conducting broad, unfocused investigations. CbCR has transformed transfer pricing audits from transaction-specific reviews to strategic, data-driven evaluations. It strengthens judicial principles—like in Maruti Suzuki India Ltd v. CIT (2010) and Shell India Markets Pvt Ltd v. ACIT (2014)—by offering quantifiable, transparent evidence of economic substance. At SKMC Global assists businesses in preparing accurate Country-by-Country Reports (CbCR) by ensuring compliance with OECD and Indian transfer pricing regulations. We provide end-to-end support in data analysis, documentation, and audit readiness to help companies maintain transparency and minimize tax risks. +91 989-125-5499 info@skmcglobal.com www.skmcglobal.com

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