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Pillar 2 Modelling Tool – OECD CbC Data

The Fourth Edition the OECDs Corporate Tax Statistics report, issued last week supports the need to press forward with the OECD Two-Pillar Solution to address base erosion issues. 

The underlying data used to produce the report included aggregated Country-by-Country (CbC) Reporting data as provided by tax authorities internationally. 
Our Modelling Tool takes the underlying source data and subjects it to a data manipulation process to provide a drill down into some of the key metrics and data sources that are relevant for Pillar Two, on a jurisdictional basis. 
The data covers over 850 jurisdictional combinations and includes:
  • Tangible Assets other than Cash
  • Total Revenues
  • Profit (Loss) before Income Tax
  • Income Tax Accrued – Current Year
  • Number of Entities
  • Number of Employees
  • Unrelated Party Revenues
  • Related Party Revenues
  • Number of CbCRs
  • Number of CbCR Sub Groups
The following should be noted:
  • The level of detail varies depending on the jurisdiction. Some jurisdictions provide for UPEs with entities in numerous jurisdiction (eg Switzerland which covers 143 jurisdictions) whilst others provide a more high-level analysis (eg Finland). This tool therefore replicates and filters the data provided by the relevant tax authorities. 
  • The tool focuses (where available) on entities in jurisdictions with a low-effective tax rate (typically sub 10%)
  • As the OECD notes care should be used is planning to carry out GloBE ETR calculations using the data for two key reasons. Firstly the tax expense is the current tax expense and doesn’t include deferred tax. Secondly, the treatment of intercompany dividends varies depending on the jurisdiction. Some jurisdictions exclude this from PBT whereas other do not. 
Nevertheless, the tool provides some extremely interesting insights, not least at potential substance-based income exclusion amounts. 

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