Country-by-country tax reporting
Defense and government contractors face a tightening disclosure environment on country-by-country tax reporting, with the U.S. Internal Revenue Service, the European Commission's Directorate-General for Taxation and Customs Union, and the Organisation for Economic Co-operation and Development all holding active authority over how multinational contractor entities document and file profit allocation data across jurisdictions. The OECD's Pillar Two global minimum tax framework, now being transposed into domestic legislation across key allied-nation markets, is forcing contractors with overseas program offices and cost-sharing arrangements to revisit transfer pricing documentation and intercompany service charges they have not had to disclose at this granularity before. Compliance teams are mapping entity structures against CBC report thresholds now, not at year-end.
Watch
- OECD Pillar Two domestic transposition deadlines vary by jurisdiction; confirm your markets.
- IRS Form 8975 filing obligations for contractors with foreign subsidiary program offices
- European Commission public CBC reporting directive: which contractor EU subsidiaries qualify
- Mismatches between DoD cost accounting standards and OECD profit allocation rules in joint ventures
Recent material activity in Defense & Government Contracting
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