Country-by-Country Reporting

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Jason B. Freeman

Jason B. Freeman

Managing Member


Mr. Freeman is the founding member of Freeman Law, PLLC. He is a dual-credentialed attorney-CPA, author, law professor, and trial attorney.

Mr. Freeman has been named by Chambers & Partners as among the leading tax and litigation attorneys in the United States and to U.S. News and World Report’s Best Lawyers in America list. He is a former recipient of the American Bar Association’s “On the Rise – Top 40 Young Lawyers” in America award. Mr. Freeman was named the “Leading Tax Controversy Litigation Attorney of the Year” for the State of Texas for 2019 and 2020 by AI.

Mr. Freeman has been recognized multiple times by D Magazine, a D Magazine Partner service, as one of the Best Lawyers in Dallas, and as a Super Lawyer by Super Lawyers, a Thomson Reuters service. He has previously been recognized by Super Lawyers as a Top 100 Up-And-Coming Attorney in Texas.

Mr. Freeman currently serves as the chairman of the Texas Society of CPAs (TXCPA). He is a former chairman of the Dallas Society of CPAs (TXCPA-Dallas). Mr. Freeman also served multiple terms as the President of the North Texas chapter of the American Academy of Attorney-CPAs. He has been previously recognized as the Young CPA of the Year in the State of Texas (an award given to only one CPA in the state of Texas under 40).

In recent years, tax authorities across the globe have adopted a number of OECD-led initiatives aimed at curbing the ability of multinational enterprises to engage in so-called Base Erosion and Profit Shifting (BEPS) (i.e., the artificial shifting of profits, for tax purposes, to low or no-tax jurisdictions).  The OECD has achieved considerable buy-in from tax authorities, touting the need to update the international tax rules, which have (it maintains) largely failed to keep up with the dual phenomena of globalization and increasingly digital economies.  Country-by-country (CbC) reporting has played a key role in its effort.

U.S. Treasury regulations require that U.S. multinational enterprises (MNEs) provide country-by-country (CbC) reporting.  Annual CbC reporting on Form 8975 largely implements the OECD’ country-by-country reporting requirements aimed at addressing base erosion and profit shifting.

What is Country-by-Country (CbC) reporting?

On June 30, 2016, the Department of the Treasury Department and the Internal Revenue Service (IRS) published final regulations (CbC reporting regulations) that require certain U.S. business entities that are the ultimate parent entity of a U.S. MNE group to file Form 8975 annually with the IRS. See §1.6038-4.

CbC reporting is part of Action 13 of the OECD’s Base Erosion and Profit Shifting (BEPS) Action Plan — an effort to promote tax transparency, particularly with respect to transfer-pricing.

As part of the CbC structure, multinational enterprise (MNE) groups must provide annual CbC reports.  A competent authority exchanges those CbC reports with a reporting entity in its jurisdiction, so long as that jurisdiction is party to a legal instrument allowing for the automatic exchange of information (e.g., double taxation convention (DTC) or tax information exchange agreement (TIEA)) and has a competent authority arrangement (CAA) for the exchange of CbC reports.

Who is Required to File CbC Reports? 

The ultimate parent entity of a U.S. MNE Group with $850 million or more of revenue in the relevant preceding annual reporting period is required to file Form 8975 and Schedules A (i.e., the “CbC Report”) with their annual income tax return.

The ultimate parent entity of a U.S. MNE group is a U.S. business entity that:

  1. Directly or indirectly owns a sufficient interest in one or more other business entities, at least one of which is organized in or a tax resident in a tax jurisdiction other than the United States, such that the U.S. business entity is required to consolidate the accounts of the other business entities with its own accounts under U.S. GAAP (or that would be so required if publicly traded); and
  2. Is not owned directly or indirectly by another business entity that consolidates the accounts of such U.S. business entity with its own accounts under GAAP in the other business entity’s tax jurisdiction of residence (or that would be so required if publicly traded in its tax jurisdiction of residence).

What is a U.S. Multinational Enterprise?

A U.S. MNE group comprises the ultimate parent entity of a U.S. MNE group and all of the business entities required to consolidate their accounts with the ultimate parent entity’s accounts under U.S. GAAP (or that would be so required if publicly traded), regardless of whether any such business entities could be excluded from consolidation solely on size or materiality grounds.

What is a “constituent entity?”  With respect to a U.S. MNE group, a constituent entity is any separate business entity of the U.S. MNE group but does not include a foreign corporation or foreign partnership for which information is not otherwise required to be furnished under section 6038(a) (determined without regard to Regulations sections 1.6038-2(j) and 1.6038-3(c)) or any permanent establishment of the foreign corporation or foreign partnership.

For these purposes, the phrase “permanent establishment” (PE) includes:



Freeman Law International Tax Symposium

Readers may be interested in the Freeman Law International Tax Symposium scheduled to take place virtually on October 20 and 21, 2022.  Attendees will qualify for CLE, CPE, and CE and the slate of presenters includes well-recognized speakers and panelists, such as a prior Chief Counsel of the IRS, a former Acting Assistant Attorney General of the U.S. Department of Justice Tax Division, and many others in government and private practice.

To Register for the Freeman Law International Tax Symposium, please visit