On June 29, 2016, the Internal Revenue Service and the Treasury Department released much-anticipated final regulations (TD 9773) on country-by-country (CbC) reporting (the Final Regulations). The Final Regulations apply to reporting periods of ultimate parent entities of US MNE groups that begin on or after the first day of the tax year of the ultimate parent entity that begins on or after June 30, 2016.

According to the preamble to the Final Regulations, Treasury and the IRS intend to allow ultimate parent entities of US MNE groups to file CbC reports for reporting periods that begin on or after January 1, 2016, but before the applicability date of the Final Regulations, under a procedure to be provided in separate, forthcoming guidance. In addition, the Preamble states that the Treasury Department is working to ensure that foreign jurisdictions implementing CbC reporting requirements will not require constituent entities of US MNE groups to file a CbC report with the foreign jurisdiction if the US MNE group files a CbC report with the IRS under this procedure and the CbC report is exchanged with that foreign jurisdiction under a competent authority arrangement.

For a discussion of the proposed regulations, issued December 21, 2015, see Tax Alert 2015-2442.

A Tax Alert on the Final Regulations is forthcoming. EY will also hold a webcast analyzing the Final Regulations on July 14, 2016, from 1:00—2:15 p.m. EDT. To register, please go to BorderCrossings.