IRS releases draft instructions for country-by-country report

Tax Hot Topics: IRS issues draft instructions for country-by-country-reportOn Feb. 23, 2017, the IRS released draft instructions for Form 8975, “Country-by-Country Report” and Form 8975 (Schedule A), “Tax Jurisdiction and Constituent Entity Information.” Both the instructions and forms are currently in draft form and are not to be relied upon or filed. The draft instructions generally reflect guidance previously provided in the regulations.

The IRS issued final regulations (T.D. 9773) on June 29, 2016, that will require U.S. multinationals with more than $850 million in revenue to report specific information on a country-by-country basis. The final regulations generally apply beginning with a U.S. multinationals’ tax year that begins on or after June 30, 2016.

The new reporting will be performed on Form 8975, Country-by-Country Report. Form 8975 will require, on a jurisdictional basis, information on the U.S. multinational group’s revenues, taxes paid, number of employees, functions performed and certain other indicators of profit allocation within the group.

Read Grant Thornton LLP’s previous coverage on final regulations here and guidance on early adoption of country-by-country reporting here.

David Sites
Washington National Tax Office
+1 202 861 4104

Cory Perry
Tax Manager, Washington National Tax Office
+1 202 521 1509

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