OECD Clarifies Dividend Treatment in Country-By-Country Reports

A consolidated group shouldn’t include dividends paid from other entities in the group in its pretax income for purposes of country-by-country tax reporting, the OECD said.

Pretax profit or loss “excludes payments received from other constituent entities that are treated as dividends in the payer’s tax jurisdiction,” the Organization for Economic Cooperation and Development said in an update to its guidance on the implementation of country-by-country reporting, part of its Base Erosion and Profit Shifting Project.

• The guidance was needed because while it was previously clear that dividends from other constituent entities shouldn’t be counted as part ...