OECD: list of common CbCR errors

Country-by-Country Reporting (CbCR) serves to provide information that enables tax authorities to conduct an informed risk assessment of transfer pricing. In May 2025, the OECD published a new overview of common errors made in preparing CbC reports. The document updated the summary from November 2019 with further common errors, reaching a total of 28. As many companies are currently preparing CbC reports for the 2024 fiscal year, this is a good moment to consider the OECD’s recently published list. This article gives a brief overview of the document published by the OECD and indicates possible impacts in case of non-compliance.

Common errors in preparing reports

Besides highlighting technical errors (especially using invalid characters in the XML schema), the list includes errors relating to data quality.
For example, common errors include:

    • incomplete data (e.g. consolidated constituent entities are left out of table 2, information regarding the exchange rate used to translate amounts to the functional currency of the reporting multinational enterprise (MNE) is left out of table 3, a subgroup of a larger MNE group files a CbC report with information solely relating to the subgroup, CbC reports are filed including data on only one tax jurisdiction, etc.);
    • income tax is shown as a negative amount;
    • disclosures are missing or incorrect (amounts in table 1, exchange rate applied, tax identification number, reporting year, permanent establishments are incorrectly named);
    • numbers are not properly presented or not shown in full (for example, EURk/EURm are used, numbers are rounded excessively, or decimals are used);
    • CbC reports are filed for reporting periods of more than 12 months in duration, which do not correspond to the reporting year of the MNE group;
    • where the main business activity of a constituent entity is stated as “Other” in table 2, the activity is not specified or the information is incorrect.

Further common errors in practice

Moreover, further common errors in practice include the following:

    • the definition of in-scope companies for CbCR purposes is solely based on the consolidated financial statements (for CbCR purposes, companies must also be included that are not considered in consolidated financial statements);
    • inconsistent application of accounting standards due to flexibility in choosing the underlying data;
    • incorrect application of criteria for inclusion of relevant revenues (e.g. other revenues are not included, payments from other group companies which are treated as dividends in the tax jurisdiction of the payer are not eliminated from revenue, etc.);
    • where required, separate account mapping is not performed, as the definitions of the key figures do not match the accounts reported in the balance sheet and income statement of the reporting company;
    • incorrect disclosures (data is not derived from the current account system and is thus incomplete; including liability accounts instead of the correct expense items in accrued taxes, etc.).

Considerations under tax criminal law

Errors in a CbCR may lead to fines. For example, the criteria of a fiscal offence under section 49b para 1 Austrian Tax Crime Act (FinStrG) may be fulfilled if, due to intent or gross negligence, the CbCR is not filed on time or if information to be reported is missing or incorrect. In accordance with section 49b para. 2 FinStrG, a fine of up to EUR 50,000 is imposed in the case of intent, and a fine of up to EUR 25,000 is imposed in the case of gross negligence. It is expected that the tax authorities will take into account the overview of common errors published in May when assessing intent or gross negligence.

Impacts for Pillar Two

Global minimum taxation (Pillar Two) has significantly increased the importance of the CbCR and its data quality requirements. The so-called transitional CbCR Safe Harbour, pursuant to section 55 Austrian Minimum Taxation Act (MinBestG), is a transitional arrangement offering taxpayers a significantly simpler alternative to full calculation of the additional tax amount, since it is essentially possible to use the data already used for CbCR purposes. However, this option requires a “qualified” CbCR.

In line with section 55 para. 3 subsec. 1 MinBestG, “qualified financial reporting” is the basis for a qualified CbCRsection 55 para. 3 subsec. 1 MinBestG. Data from one of three permissible data sources must be used (for example, IFRS or Austrian GAAP (UGB) data). Moreover, uniform application of accounting data is required, and special provisions must be observed when applying the acquisition method to acquisitions of shareholdings. Moreover, the wording of the Pillar Two rules does not specify the criteria for classification as a “qualified CbCR” for Pillar Two purposes, leaving scope for interpretation.

In any case, the financial data derived from the CbCR must be correct if the transitional CbCR Safe Harbour is to be applied. Thus, the overview of common errors in the CbCR process includes errors relevant to assessing the correctness and applicability of the CbCR Safe Harbour calculation. Nevertheless, it is in any case advisable to eliminate common errors, even if they do not have a direct effect on calculating the “transitional CbCR Safe Harbour”.

It is important to ensure that the CbCR is qualified since a negative assessment (no qualified CbCR) can have broad consequences. The full calculation of additional taxation, which would be required in such a case, is complex and time-consuming. In general, it is possible to apply the “transitional CbCR Safe Harbour” throughout the transition period if the requirements are met. However, if no qualified CbCR is available in one reporting year pursuant to section 55 para. 4 subsec. 5 MinBestG , the “transitional CbCR Safe Harbour” simplification is also not applicable in the following years of the transition period.

Conclusion and outlook

Quality requirements for CbCR are increasing in importance. In addition to considerations under tax criminal law, a qualified CbCR is required for applying the “transitional CbCR Safe Harbour” under Pillar Two.

The upcoming requirement to publish a “Public CbCR” provides an additional reason to look at the quality of CbCR data. Taxpayers with reporting obligations are well advised to review their CbCR data for the common errors published by the OECD and prepare correct CbC reporting.

PwC’s transfer pricing experts from Austria and from the international PwC network are happy to support you. This includes assessing possible issues which might arise from the recently published sources of errors, as well as converting CbCR data to the required XML format comprising filing the CbCR as well as the CbCR notification. Moreover, we are happy to support you with a risk assessment using our data analysis tools. PwC has developed technology solutions especially for this purpose.

 

Author: Jan Hinterreitner

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