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Country-by-Country Reporting


What is Country-by-Country Reporting

Country-by-Country (CbC) Reporting is a minimum standard formulated by the Organisation for Economic Co-operation and Development (OECD) under Action 13 of the Base Erosion and Profit Shifting (BEPS) Package.

Under this standard, a multinational enterprise group (MNE Group) is required to file a CbC Report in relation to an accounting period where:

  • the consolidated group revenue for the preceding accounting period is at least EUR750 million (or HK$6.8 billion); and
  • the group has constituent entities or operations in two or more jurisdictions.

The CbC Report requires aggregate tax jurisdiction-wide information relating to the global allocation of the income, the taxes paid, and certain indicators of the location of economic activity among tax jurisdictions in which the MNE Group operates. The Report also requires a listing of all the constituent entities for which financial information is reported, including the jurisdiction of incorporation of each of the constituent entities (if different from the tax jurisdiction of residence) and the main business activities carried out by that entity.

CbC Reports are to be exchanged automatically between tax administrations under relevant exchange arrangements.


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Implementation in Hong Kong

The implementation framework for CbC reporting in Hong Kong is provided under the Inland Revenue (Amendment) (No. 6) Bill 2017 (the Bill). The Bill was published in the Gazette on 29 December 2017 and was passed by the Legislative Council (LegCo) on 4 July 2018. The Inland Revenue (Amendment) (No. 6) Ordinance 2018, which commenced operation on 13 July 2018, put in place a legislative framework for Hong Kong to implement the CbC reporting.

The requirements for filing a CbC Return, which includes a CbC Report, only apply to a MNE Group whose annual consolidated group revenue reaches the specified threshold amount, i.e. HK$6.8 billion (Reportable Group).

In respect of a Reportable Group, the primary obligation of filing a CbC Return is on the ultimate parent entity (UPE) resident in Hong Kong (HK UPE) and not on any other constituent entities resident in Hong Kong (Hong Kong Entities). The HK UPE is required to file a CbC Return for each accounting period beginning on or after 1 January 2018. The HK UPE may also voluntarily file a CbC Return for an accounting period beginning between 1 January 2016 and 31 December 2017.

A Hong Kong Entity of a Reportable Group whose UPE is not resident in Hong Kong is subject to a secondary obligation of filing a CbC Return if any of the following conditions is met:

  • the UPE is not required to file a CbC Report in its jurisdiction of tax residence;
  • the jurisdiction has a current international agreement with Hong Kong providing for automatic exchange of tax information but, by the deadline for filing the CbC Return, there is no exchange arrangement in place between the jurisdiction and Hong Kong for CbC Reports;
  • there has been a systemic failure to exchange CbC Reports by the jurisdiction, which has been notified to the Hong Kong Entity by the Commissioner.

Even if one of the above conditions is met, the Hong Kong Entity is not required to file a CbC Return if:

  • a CbC Return for the relevant accounting period is filed by another Hong Kong Entity of the Reportable Group; or
  • the Reportable Group has authorized a constituent entity as its surrogate parent entity (SPE) to file CbC Report on behalf of the Group, and the CbC Report is filed by the SPE in Hong Kong or a jurisdiction which has an exchange arrangement in place with Hong Kong.

Every Hong Kong Entity is required to make a notification containing information relevant for determining the obligation for filing a CbC Return within 3 months after the end of the relevant accounting period.  For a Reportable Group with more than one Hong Kong Entity, a Hong Kong Entity is not required to make a notification provided that it is not the entity which is to file a CbC Return and another Hong Kong Entity has already made the notification.  In practice, an assessor will give a filing notice to an entity which has made such notification or any other entity which is considered to be obliged to file a CbC Return.

The deadline for filing a CbC Return is 12 months after the end of the relevant accounting period or the date specified in the assessor’s notice, whichever is the earlier.

A service provider (SP) may be engaged to file a CbC Return or the related notification.  Penalties are provided in respect of matters such as failing to file CbC Returns and providing misleading, false or inaccurate information in CbC Returns.  Some of the penalty provisions will also apply to service providers.


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Notification and Return Filing

To facilitate CbC reporting, the Department has developed the CbC Reporting Portal for Hong Kong Entities to:

  • submit notifications of obligations to file CbC Returns;
  • submit notifications of change of address;
  • file CbC Returns; and
  • receive or send messages in relation to CbC reporting.

To access the CbC Reporting Portal, please click here.

A Hong Kong Entity should register a CbC Reporting Account under the CbC Reporting Portal for accessing the services provided thereunder.  The person authorized to register a CbC Reporting Account for the entity has to possess an e-Cert (Organisational) with AEOI Functions for authentication purposes. More information about the application for e-Cert (Organisational) with AEOI Functions can be found in the website of the Hongkong Post Certification Authority.

If a SP or the person responsible for managing a non-corporate entity (PRM) is authorized to register and/or operate the CbC Reporting Account, the Department should be informed by a Authorization Form for Registration/Operation of CbC Reporting Account (Form IR1465).  Please note that an authorized person of the SP or the PRM must also possess an e-Cert (Organisational) with AEOI Functions for authentication purposes.

A SP or PRM may act for more than one Hong Kong Entity to register / operate CbC Reporting Accounts and submit CbC Returns.  Application for Lead Operator Reference Number (Form IR1466) may be made by the SP or PRM for the facility to access, as a lead operator, the CbC Reporting Accounts of relevant Hong Kong Entities through one single log-in.

A CbC Report (which forms part of a CbC Return) must be made in the form of an XML document. The reason for this is that XML documents can be validated and provide a common medium for exchange between the jurisdictions who have introduced CbC reporting requirements. In this regard, the Department has developed a data schema in XML which is based on the CbC XML Schema v1.0.1 issued by the OECD. The data schema specifies the data structure and format for filing CbC Report to the Department. Please click the following links to download the current version of the data schema and related user guide:


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Voluntary Filing of CbC Return

Some jurisdictions have introduced CbC reporting requirements for accounting periods beginning on or after 1 January 2016.  Such a jurisdiction may require a constituent entity resident there to file a CbC Report if the constituent entity is part of a Reportable Group with the UPE resident in another jurisdiction that does not have a CbC reporting requirement for the same accounting period (Local CbC Filing).  As Hong Kong has only implemented CbC reporting for accounting periods beginning from 1 January 2018, constituent entities of a Reportable Group with HK UPE (HK Reportable Group) may be subject to Local CbC Filing for an accounting period beginning between 1 January 2016 and 31 December 2017 (Early Reporting Period).  To mitigate the Local CbC Filing exposure of HK Reportable Groups, the HK UPE of such a group may voluntarily file a CbC Return for an Early Reporting Period to the Department such that the CbC Report included therein can be exchanged with relevant jurisdictions.  All the aforesaid requirements for CbC reporting will apply to the voluntary filing of the CbC Return except the following:

  • The HK UPE which intends to voluntarily file a CbC Return for an Early Reporting Period is not required to make a notification; 
  • The HK UPE or its SP/PRM may request a CbC Return for completion under the CbC Reporting Portal after registration of a CbC Reporting Account;
  • For an Early Reporting Period beginning between 1 January 2016 and 31 March 2016, the deadline for filing a CbC Return is 31 March 2018;
  • For an Early Reporting Period beginning between 1 April 2016 and 31 December 2017, the deadline for filing a CbC Return is 12 months after the end of the relevant accounting period.
Under section 58E(2) of the Inland Revenue Ordinance, a Hong Kong ultimate parent entity may voluntarily file a country-by-country (CbC) return in respect of an accounting period beginning on or after 1 January 2016 but before 1 January 2018 by the filing deadline, which is the date on which a period of 12 months after the end of the accounting period expires. Effective from 1 April 2019, the Department will not accept voluntary filing of a CbC Return for an accounting period ended on or before 31 March 2018. Pursuant to the bilateral exchange arrangements, Hong Kong should exchange CbC Reports with treaty partners within 18 months after the end of an accounting period commencing in 2016, or 15 months after the end of an accounting period commencing in 2017.

A HK Reportable Group should take note that whether this voluntary filing of the CbC Return can relieve its Local CbC Filing obligation in a jurisdiction would depend on the CbC reporting requirements of that jurisdiction. 


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Automatic Exchange of Country-by-Country Reports

The Multilateral Convention on Mutual Administrative Assistance in Tax Matters (the Multilateral Convention) will be the main platform for Hong Kong to exchange CbC Reports with other jurisdictions.  On 2 February 2018, the Inland Revenue (Amendment) Ordinance 2018 was enacted to empower the Chief Executive-in-Council (CE-in-C) to make an order for giving effect to the Multilateral Convention in Hong Kong. The CE-in-C made the Inland Revenue (Convention on Mutual Administrative Assistance in Tax matters) Order on 10 July 2018. The Multilateral Convention will enter into force in Hong Kong on 1 September 2018.

Since the Multilateral Convention is not applicable in respect of the Early Reporting Periods, bilateral arrangements for exchange of CbC Reports need to be made with jurisdictions having Comprehensive Avoidance of Double Taxation Agreements (CDTAs) with Hong Kong. So far, Hong Kong has made such bilateral arrangements with the following jurisdictions:

Jurisdiction CbC Report for First Exchange 
 Austria 2017
 Canada 2017
 France 2016
 Guernsey 2017
 Indonesia 2017
 Ireland 2016
 Italy 2018
 Japan 2017
 Jersey 2017
 Korea 2017
 Latvia 2018
 Malta 2017
 Mexico 2017
 Netherlands  2017
 New Zealand 2017
 Portugal 2017
 South Africa 2016
 United Kingdom  2016

Meanwhile, the Government will continue discussions with other CDTA partners, seeking to conclude as many bilateral arrangements as practicable for the Early Reporting Periods.

You may find out more information about the exchange relationships between Hong Kong and other jurisdictions for the exchange of CbC reports at the OECD’s website:


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Appropriate Use of Information in Country-by-Country Reports

The BEPS Action 13 Final Report sets out three permitted uses for the information in CbC Reports (CbCR information), namely:

  • high level transfer pricing risk assessment;
  • assessment of other BEPS-related risks; and
  • economic and statistical analysis where appropriate.

The Department is committed to using CbCR information in accordance with the uses permitted in the BEPS Action 13 Final Report.  The Department will not use CbCR information, by itself, to assess or reassess taxpayers' income for the purposes of the Inland Revenue Ordinance.

The Department will not use CbCR information as a substitute for a detailed transfer pricing analysis of individual transactions and prices based on a full functional analysis and a full comparability analysis. CbCR information on its own will not constitute conclusive evidence that transfer prices are or are not appropriate, and will not be used to propose transfer pricing adjustments based on a global formulary apportionment of income. Any breach of appropriate use of CbCR information will be disclosed as required under relevant exchange arrangements, and any inappropriate tax adjustment based on CbCR information will be conceded in any relevant competent authority proceeding.

However, the Department may use CbCR information in planning a tax audit or investigation, or as the basis for making further enquiries into the MNE Group’s transfer pricing arrangements or other tax matters, in the course of an audit. There is also no requirement that these enquiries must relate specifically to potential risks identified through the use of CbCR information. For example, CbCR information (such as the details of constituent entities) may be used as the basis for making enquiries into tax matters identified using other data sources or arising during the course of a tax audit or investigation.

The term "assessment of other BEPS-related risk" refers to the high level assessment of tax risks that may result in the erosion of a jurisdiction's tax base.  In practice, while CbCR information may be used to identify indicators of possible tax risk, it will usually be possible to understand the arrangements giving rise to that risk after further enquiries have been conducted.  In this regard, the Department will limit the use of CbCR information to risk assessment and making of enquiries in the course of a tax audit or investigation.  The information will not be taken as conclusive evidence that a MNE Group is engaged in other forms of BEPS.


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Trial Run of Country-by-Country Reporting Portal

To enable Hong Kong Entities to better understand the operation of the CbC Reporting Portal, the Department is organizing a trial run of the functions provided under the CbC Reporting Portal. Hong Kong Entities are welcome to participate in the trial run. The trial run consists of two phases:

  • Phase 1 – Account registration, submitting CbC Report for voluntary filing, and sending and receiving e-messages;
  • Phase 2 – Notification of reporting entity and data preparation tool (tentatively in the latter half of 2018).

Before participating in the trial run, a Hong Kong Entity should:

  • read carefully the Notes on the Trial Run;
  • prepare the pre-requisite documents as mentioned in paragraph (B) of the Notes on the Trial Run; and
  • complete an online form to enrol in the trial run.

Any enquiry regarding the trial run arrangements can be sent to


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Materials on Country-by-Country Reporting

Inland Revenue Ordinance

OECD Materials


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Frequently Asked Questions

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If you have any question regarding CbC reporting, you may send your enquiry to the following e-mail address: