Instructions For Form 8975 And Schedule A (Form 8975) - Country-By-Country Report Page 5

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Taxes paid should include taxes paid in cash by a
purposes of this schedule, tangible assets do not include
constituent entity listed in Part II to its tax jurisdiction and to
cash or cash equivalents, intangibles, or financial assets.
all other tax jurisdictions. Taxes paid should include
For permanent establishments, assets should be reported
withholding taxes paid by other entities (whether related or
on the Schedule A (Form 8975) for the tax jurisdiction in
unrelated) with respect to payments to the constituent
which the permanent establishment is located.
entities in Part II.
Part II—Constituent Entity
Example. If, during a reporting period, Company X
Information
(resident in tax jurisdiction X) generates operating income in
tax jurisdiction X that is subject to corporate income tax in tax
In this section, you will provide constituent entity information
jurisdiction X and earns interest income from a company in
for your group regarding the constituent entities that have the
tax jurisdiction Y subject to withholding tax in tax jurisdiction
tax jurisdiction indicated in Part I. You should complete a row
Y, the taxes paid to tax jurisdiction X on the operating income
for each constituent entity providing the information indicated
and the tax withheld on the interest and paid to tax
below.
jurisdiction Y should be reported as part of the income taxes
paid by Company X on the Schedule A for tax jurisdiction X.
Line 1. Enter the full legal name of the constituent entity,
including the domestic designation for the legal form, as
Line 4. Enter the aggregate of the total accrued current
indicated in its articles of incorporation or any similar
income tax expense recorded on taxable profits or losses,
document. If the constituent entity is a permanent
reflecting only operations in the relevant annual period and
establishment, the naming convention to use is the name of
excluding deferred taxes or provisions for uncertain tax
the constituent entity of which the permanent establishment
liabilities, for the constituent entities listed in Part II.
would be a part (if it were not its own constituent entity),
When a constituent entity listed in Part II is a permanent
followed by “- (PE).” For instance, if XYZ Corp has a
establishment, the amounts on line 3 and line 4 should not
permanent establishment, that permanent establishment’s
include the income tax paid or current income tax expense
name would be “XYZ Corp - (PE).”
accrued by the business entity of which the permanent
If filing electronically, the address of the constituent entity
establishment would otherwise be a part in that business
also may be provided.
entity’s tax jurisdiction of residence on the income derived by
the permanent establishment. For example, if Company X
Line 2. Enter the tax identification number (TIN), if any, used
(resident in tax jurisdiction X) has a permanent establishment
for the constituent entity by the tax administration in the tax
“PE Y” in tax jurisdiction Y that is considered a constituent
jurisdiction of residence. The TIN is a mandatory field and
entity, and Company X pays tax jurisdiction X income tax on
must be entered for each constituent entity. If the constituent
income earned by PE Y, then that income tax paid should be
entity does not have a TIN, then enter “NOTIN.”
reflected on the Schedule A for tax jurisdiction X. However,
If filing electronically, one or more entity identification
income tax paid to tax jurisdiction Y on income earned by PE
numbers (IN), such as a company registration number, can
Y is not included on the Schedule A for tax jurisdiction X, but
be provided, along with the IN’s issuer country and type.
rather on the Schedule A for tax jurisdiction Y.
Line 3. Using the two-letter code from the list at
IRS.gov/
Line 5. Enter the aggregate amount of the stated capital of
CountryCodes, enter the tax jurisdiction in which the
the constituent entities listed in Part II.
constituent entity is organized or incorporated if different from
The stated capital of a permanent establishment must be
the tax jurisdiction of residence.
reported in the tax jurisdiction of residence of the legal entity
Line 4a. Identify the nature of the main business activity of
of which it is a permanent establishment unless there is a
the constituent entity in the relevant tax jurisdiction by
defined capital requirement in the permanent establishment
selecting at least one of the following codes or categories.
tax jurisdiction for regulatory purposes.
CBC501 Research and development
Line 6. Enter the aggregate of total accumulated earnings of
CBC502 Holding or managing intellectual property
the constituent entities listed in Part II. However, the
CBC503 Purchasing or procurement
accumulated earnings of a permanent establishment are
CBC504 Manufacturing or production
considered those of the legal entity of which it is a permanent
CBC505 Sales, marketing, or distribution
establishment and should be reported on the Schedule A
CBC506 Administrative, management, or support services
(Form 8975) for the tax jurisdiction of the legal entity owner.
CBC507 Provision of services to unrelated parties
CBC508 Internal group finance
Line 7. Enter the aggregate number of employees on a
CBC509 Regulated financial services
full-time equivalent basis of the constituent entities listed in
CBC510 Insurance
Part II. The number of employees may be reported as of the
CBC511 Holding shares or other equity instruments
year-end, on the basis of average employment levels for the
CBC512 Dormant
year, or on any other basis consistently applied across tax
CBC513 Other
jurisdictions of your group and from year to year.
Those that do not file electronically are limited to indicating
Reasonable rounding or approximation of the number of
a maximum of three main business activities. However, if you
employees is permissible, provided that such rounding or
feel this does not properly reflect the main businesses of a
approximation does not materially distort the relative
constituent entity, you may use Part III, Additional
distribution of employees across the various tax jurisdictions
Information, on the appropriate Schedule A (Form 8975) to
of your group. Consistent approaches should be applied from
enter additional codes and explain.
year to year and across entities.
Line 4b. If you entered the code for “Other” in line 4a,
Line 8. Enter the aggregate of the net book value of tangible
describe the “Other” business activity.
assets of all the constituent entities listed in Part II. For
-5-
Instructions for Form 8975 (June 2017)

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