Multinationals should get prepared to submit the Country-by-Country Reporting


Multinationals should get prepared to submit the Country-by-Country Reporting

Companies that take part in international groups should be aware of the obligation to present the Country-by-Country Reporting to the Federal Revenue Office

The Country-by-Country (CbC) reporting is part of the Base Erosion and Profit Shifting (BEPS) project, aimed at fighting tax avoidance and capital flight to tax havens. More than complying with Brazilian legislation, this requirement also complies with international agreements and treaties on tax matters, created by the collaboration between countries.

Although it has been required by the Brazilian Federal Revenue Office for some years, the report still raises many questions among taxpayers. However, it is necessary to pay attention to this annual requirement, since there are penalties in case of non-compliance.

Country-by-Country Reporting: What is it?

This is an annual ancillary obligation that multinational groups must submit to the tax jurisdiction of residence, including data and indicators related to the location of its activities, global allocation of income, taxes paid and due.

The Country-by-Country Reporting was established by Normative Instruction RFB No. 1681/2016, which also determined that its submission is connected to the annual submission of Tax and Accounting Bookkeeping (Escrituração Contábil Fiscal - ECF) and its transmission to the Public Digital Bookkeeping System (Sistema Público de Escrituração Digital - Sped).

Are all multinational enterprises required to submit the Country-by-Country Reporting?

No. Check below all obligation and exemption conditions:


The obligation lies upon ultimate parent companies of multinational groups, with tax residence in Brazil.

Even if the company is not the ultimate parent, the report is still required in the following cases:

  • the ultimate parent of the multinational group is not required to present a CbC report in its jurisdiction of residence;
  • the ultimate parent company's jurisdiction of residence has signed an international agreement with Brazil, but does not have a competent authority agreement with Brazil until the submission deadline; or
  • there was a systemic failure at the ultimate parent's jurisdiction of residence, which has been notified by the Brazilian Federal Revenue Office to the member entity residing in Brazil.


Are exempt from submitting the Country-by-Country Reporting entities residing in Brazil, whose consolidated income of the multinational group, on the fiscal year preceding the report's fiscal year, is less than:

  • BRL 2,260,000,000.00 (two billion two hundred sixty million Brazilian reais), if the ultimate parent resides in Brazil for tax purposes; or
  • € 750,000,000.00 (seven hundred fifty million euros), or the equivalent to that, converted by the exchange rate on December 31 to the local currency of the jurisdiction of tax residence.

It is worth mentioning that member entities residing in Brazil should notify the Federal Revenue Office if they are exempt from submission. The justification should be presented in ECF - Block W.

What is the deadline for submitting the CbC report?

Since it is connected to ECF, the Country-by-Country Reporting follows this statement's schedule. Therefore, the CbC report must be submitted annualy by the last business day in July of the year after the operations occurred.

It is worth remembering that last year and this year, due to the coronavirus pandemic, ECF's deadline was postponed to the last business day in September. Therefore, the deadline for submitting the obligation in 2021 is September 30*.

Read also: ECD and ECF: the obligations’ cross-check requires preliminary analysis and technological support to ensure compliance.

What are the consequences of non-compliance?

By failing to comply with obligation related to the CbC report, presenting incorrect data or omitting information, the company can be notified to provide clarifications to the tax authority and is subject to fines:

a) for late submission:

  • BRL 500.00 per calendar month or fraction thereof, if the company is starting its activity or it has determined assumed profit in the last submitted ECF;
  • BRL 1,500.00 per calendar month or fraction thereof, in the remaining cases;

b) for not responding to the Federal Revenue Office notice to comply with obligation related to the CbC report or to provide clarifications within the time limit set by the tax authority: BRL 500.00 per calendar month; and

c) for omitting informating regarding the CbC report or providing incorrect or incomplete information: 3%, not less than BRL 100.00 of the omitted, innacurate or incomplete amount.

Note: The fine for late submission will be reduced by half when the obligation is fulfilled before any official procedure by the Federal Revenue Office.

Your business prepared to submit the CbC report

For ensuring tax and accounting compliance, it is essential to rely on a partnership that is experienced with tax authorities' requirements and dedicated to providing personalized services to your company.

The multidisciplinary team at Domingues e Pinho Contadores seeks to establish a close relationship with clients to provide personalized solutions, not only to ensure compliance with CbC reporting obligations, but also to support the company in its strategic decisions.

*Article updated on 07/16/2021.

Author: Marluci Azevedo, partner at Domingues e Pinho Contadores.

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