IRS issues notice on national security considerations with respect to CbC reporting

Tax Hot Topics newsletter On March 30, the IRS issued Notice 2018-31 announcing that it will amend certain country-by-country (CbC) reporting requirements under Treas. Reg. Sec. 1.6038-4 as a result of national security concerns. In June 2016, the IRS released final regulations (T.D. 9773) that addressed CbC reporting requirements for U.S.-headquartered multinational entities (MNEs) with annual revenue of $850 million or more.

The notice provides modifications to the reporting requirements for U.S. MNEs considered “specified national security contractors” due to national security interests. Under the notice, a U.S. MNE is a “specified national security contractor” if 50% or more of the group’s annual revenue in the preceding reporting period is attributable to contracts with the Department of Defense or other U.S. government intelligence or security agencies. In such cases, the notice provides revised procedures on how to file Form 8975, Country-by-Country Report in addition to guidance on how to amend previously filed Forms 8975 for U.S. multinational groups.

For prior Grant Thornton coverage on the country-by-country reporting requirements, click here.

David Sites
Washington National Tax Office
T +1 202 861 4104

David Zaiken
Managing Director
Washington National Tax Office
T +1 202 521 1543

Cory Perry
Tax – Exp. Manager
Washington National Tax Office
T +1 202 521 1509

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