Q: When the preceding fiscal year of an Ultimate Parent Entity was s​​horter than 12 months, how should it be determined whether the Group is or is not an Excluded MNE Group for CbCR reporting purposes?

Kunj Vaidya (Partner and Leader, Transfer Pricing, PwC India)

If the preceding fiscal of the Ultimate Parent Entity (“UPE”) is shorter than 12 months, considering the OECD CbCR Guidance, UPE may adopt different approaches (as listed below), to evaluate the CbCR exemption threshold:

1) Use the actual total consolidated group revenue obtained by UPE for the short accounting period;

2) Adjust the total consolidated group revenue for the short accounting period to reflect the consolidated UPE group revenue that would correspond to a 12 month accounting period; or

3) Calculate the pro rata share of the Euro 750 million threshold that would correspond to the short accounting period

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