The Barbados Revenue Authority has announced the introduction of Country-by-Country (CbC) reporting requirements as provided for by the Income Tax (Country-by-Country Reporting) Act 2021, which was published in the Official Gazette on 24 December 2021.

The CbC reporting requirements apply from 1 January 2021 for MNE groups meeting an annual consolidated revenue threshold of USD 850 million in the preceding fiscal year. The requirement to submit a CbC report primarily applies for ultimate parent entities of MNE groups tax resident in Barbados, although non-parent constituent entities in Barbados are subject to secondary local filing requirements where:

• the ultimate parent entity of the MNE Group is not obligated to file a CbC report in its jurisdiction of tax residence;
• the jurisdiction in which the ultimate parent entity is resident for tax purposes has an international agreement to which Barbados is a party, but does not have a qualifying competent authority agreement in effect for the exchange of CbC reports with Barbados when the CbC report is due; or
• the Competent Authority has notified the constituent entity that there is a systemic failure to exchange by the jurisdiction of tax residence of the ultimate parent entity.

Where more than one constituent entity would be required to file, one may be designated as a surrogate parent entity for filing a CbC report. The secondary local filing requirement will not apply, however, if a surrogate parent entity has been designated for filing in another jurisdiction and certain conditions are met, including that the CbC report will be exchanged with Barbados.

CbC Notification requirements are also prescribed, including that any constituent entity of an MNE Group that is resident for tax purposes in Barbados shall, where applicable, notify the Competent Authority whether it is the ultimate parent entity or the surrogate parent entity of the MNE Group no later than the last day of the reporting fiscal year of the MNE Group. If neither, constituent entities are required to notify the competent authority of the identity and tax residence of the reporting entity no later than the last day of the reporting fiscal year of the MNE Group.

When required CbC reports must be filed within 12 months following the close of the report fiscal year. Considering that the requirements apply for reporting fiscal years beginning on or after 1 January 2021, the first CbC reports will be due in Barbados by 31 December 2022.

Failing to comply with the CbC report and notification requirements will result in a penalty of BBD 10,000, plus the possibility of additional penalties of BBD 5,000 per day the failure continues after the initial penalty was due. Certain other penalties may also apply, including a fine of up to BBD 50,000 for knowingly making or submitting a false CbC report.

Note, this article has been updated to reflect that the CbC reporting requirements apply for reporting fiscal years beginning on or after 1 January 2021.