Country by country reporting

A multinational group must prepare a country by country (CbC) report for a period if its consolidated revenue was at least €750 million in the previous period. In the UK the report is filed by a UK resident ultimate parent, or in limited cases by the top UK entity of a foreign headed group, within 12 months of the period end. Annual advance notifications to HMRC were abolished from 26 July 2023, but some notifications still apply when a UK entity relies on another group member’s filing.

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What is a country by country report?

CbC reporting came out of the OECD’s work on base erosion and profit shifting. HMRC’s International Exchange of Information Manual at IEIM300010 explains that the OECD’s final report on Action 13, published in October 2015, set a three tier approach to transfer pricing documentation: a master file, a local file and the CbC report. The UK rules are in the CbC reporting regulations made in 2016 (SI 2016/237), which have been amended since.

The report shows, for each tax jurisdiction where the group does business, its revenue, profit before income tax, income tax paid and accrued, employee numbers, stated capital, retained earnings and tangible assets (IEIM300080). A UK ultimate parent must also list each group entity in each jurisdiction and its main business activity. The master file and local file requirements are separate; see our guide to transfer pricing documentation.

Which groups are in scope?

Regulation 3 sets the threshold. A multinational (MNE) group, meaning one with two or more enterprises resident for tax purposes in different jurisdictions, is caught for a period (P+1) if its consolidated group revenue for the previous period (P) was €750 million or more. The test uses revenue as shown in the consolidated financial statements, or as would have been shown if the group had been required to prepare them because its shares were listed.

Three details of the test are often missed:

Currency. Where the group reports in another currency, regulation 3(3) converts €750 million at the average exchange rate for P.
Period length. If P is longer or shorter than 12 months, regulation 3(4) increases or reduces the threshold proportionately.
Location of the parent. The test applies to the group’s revenue whether or not it is headed in the UK (IEIM300030).

IEIM300050 adds a concession for currency movements. Where a foreign parent’s home threshold is set in a local currency at a near equivalent of €750 million as at January 2015, and the group falls below that home threshold but above €750 million only because of exchange rate movements, HMRC will not require a UK local filing.

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Who has to file in the UK?

A UK ultimate parent

Under regulation 3A each UK ultimate parent entity of an in scope group must file a CbC report for P+1 by the filing deadline. For these purposes the ultimate parent must be resident in the UK for tax purposes if it is a company, or formed under UK law if it is a partnership. For a partnership, the obligation falls on the partner required to deliver the partnership return under section 12AA of the Taxes Management Act 1970.

The top UK entity of a foreign headed group

Where the ultimate parent is abroad, a UK entity (a UK resident group company, or one with a UK permanent establishment, not included in the consolidated statements of another UK entity) has an obligation only if one of the conditions in regulation 6 is met:

the parent is not required to file a CbC report in its own jurisdiction;
the parent’s jurisdiction has an international agreement on exchange of information but no arrangement with HMRC to exchange CbC reports for the period; or
HMRC has notified the UK entity that exchange arrangements with that jurisdiction are not operating effectively.

IEIM300160 states that there are currently no countries where HMRC has decided exchange is not working effectively. So for most groups headed in a country that implements CbC reporting and exchanges with the UK, the UK subsidiaries have nothing to file.

Where a condition is met, regulation 3B requires the UK entity to ask its ultimate parent for the information needed and file a full report. If the information has not arrived by the deadline, it must notify HMRC in writing that the parent has not provided it and file a UK report covering itself and the entities it consolidates.

What notifications are still required?

Until 26 July 2023, ultimate parents and UK entities had to notify HMRC for every period covered by a report, including where an exception applied. Amending regulations in 2023 (SI 2023/752) removed that requirement (IEIM300110). The notifications that remain are:

Situation	What must be sent, by the filing deadline
A UK entity relies on a report already filed with HMRC by another group member (Exception A)	The name of the entity that filed and the date it filed
A UK entity relies on a report filed abroad in a jurisdiction that exchanges with HMRC (Exception B)	The filing entity, its tax residence, the jurisdiction where the report was filed and the filing date
A UK entity cannot obtain the parent’s information	Written notice that the parent has not provided it
Another group entity files voluntarily for the group (regulation 3D)	The ultimate parent notifies HMRC in writing that the entity is authorised to file

IEIM300060 asks for exception details by email to notification.cbcrfiling@hmrc.gov.uk, including the reporting period and whether exception A or B is used. It also stresses that if there is no filing obligation in the first place, the exceptions do not need to be considered.

When and how is the report filed?

The filing deadline in regulation 2 is 12 months after the end of the period to which the report relates, and CbC reports apply to periods starting on or after 1 January 2016 (IEIM300040). IEIM300121 explains that reports must be filed online through a secure HMRC portal in XML format, after a one off registration that can be updated later.

Illustration only. A UK headed group has consolidated revenue of €820 million for the year to 31 December 2025. It is in scope for the year to 31 December 2026 even if revenue falls that year, and the report for 2026 is due by 31 December 2027.

What does HMRC look for in the content?

IEIM300140 lists common errors HMRC finds:

For periods beginning on or after 1 January 2020, dividends from other group entities must be excluded from both revenue and profit before tax. From 1 January 2024 that means payments treated as dividends in the payer’s own source data.
The report must use one currency, the functional currency of the ultimate parent, and full numbers rather than thousands or millions.
Each jurisdiction appears once in Table 1, aggregated.
Employees, tangible assets and stated capital should not be negative; any negative figure needs an explanation in Table 3.
NOTIN may be used only where an entity genuinely has no tax identification number, with a note in Table 3.

How does HMRC use the data?

IEIM300160 says reports are shared automatically with the tax authorities of jurisdictions named in them, where an exchange agreement allows, and HMRC has committed to exchange within 15 months of the period end. Under IEIM300190 the data may be used only for high level transfer pricing risk assessment, assessment of other base erosion risks and statistical analysis, and HMRC has agreed not to use it as a substitute for a detailed transfer pricing analysis. A CbC report does not by itself prove that prices are wrong. The data has a second use: groups can draw on it for the transitional safe harbour under Pillar Two, so errors can carry through.

What are the penalties?

A failure to file, or to comply with an HMRC direction to provide information, carries a penalty of £300 (regulation 12).
If the failure continues after the assessment is notified, a further penalty of up to £60 a day applies (regulation 13).
Inaccurate information carries a penalty of up to £3,000 per report where the person knew of the error and did not tell HMRC, or discovered it later and did not take reasonable steps to tell HMRC (regulation 14).

Regulation 15 removes liability where there is a reasonable excuse, but an insufficiency of funds or reliance on another person is not one. That second point is important for UK subsidiaries counting on an overseas parent to file.

What mistakes cause problems?

Testing the threshold against the current year’s revenue instead of the previous period’s.
Assuming a UK subsidiary of a foreign group never has a filing duty, without checking the regulation 6 conditions.
Continuing to send annual notifications that are no longer required, while missing the exception or authorisation notices that are.
Mixing currencies or including intra group dividends in Table 1.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.