Country-by-country reporting with the right software: an interview with expert Lisa Hägele
What you can expect from this article
Preparing a country-by-country report can be a lengthy and labourious process. This was certainly the case for tax adviser Lisa Hägele. On the programme „hsp live um 11“, the experienced professional spoke to Paul Liese about the teething problems she encountered and the solutions she found.
CbCR using Excel is proving to be a dead end
Lisa Hägele is a tax adviser at the Düsseldorf-based firm ADKL. Among other things, she specialises in transfer pricing, which also includes country-by-country reporting. When the CbCR issue landed on Lisa’s desk, her initial approaches to a solution were rather rudimentary. She received the relevant client data in the form of Excel spreadsheets. For CbCR, this data must be submitted in the correct format to the Federal Central Tax Office (BZSt). At first, Lisa thought she could simply forward the Excel spreadsheet to the BZSt and the job would be done. But it wasn’t quite that simple.
Before anything can be submitted at all, a registration must be made with the BZSt. The registration process had already dragged on for some time. Once this was finally sorted, Lisa couldn’t simply submit the Excel file straight away. The data must be submitted in a CSV file. As if the conversion weren’t complicated enough, the BZSt has a whole catalogue of formatting rules for the CSV file.
Paul points out an additional hurdle: the upload. With ELSTER, feedback is provided following submission if there are any errors. With the BZSt, FTP access is provided for the upload. If an error occurs, only an error message is displayed; there is no feedback on the content. The tax adviser must then work out for themselves where the error lies. This could be due to incorrect formatting, or it could be that data is missing.
CbCR chaos leads to a seamless software solution
All this misery led to a desire for a workable CbCR tool to approach hsp. Lisa provided hsp developer Fabian Klapproth with all the data and information, the BZSt letter and the formatting guidelines. On this basis, Fabian developed an initial version. The two of them went through the version together; Fabian then refined it and handed over a fully functional second version to the tax adviser. Lisa used this to carry out a test run, creating a test client and simulating the CbCR preparation process in a realistic manner.
Paul wants to know whether the tool has met the requirements of the law firm and the CbCR specialist. Lisa can only confirm that it has. The tool has not only simplified the submission process, but also data entry. The data is checked for completeness and plausibility even before it is submitted. Excel files can be imported; the data is automatically entered in the correct format. The process uses an input form, making it structured and straightforward.
Simple data collection for CbCR preparation
Data collection varies depending on the client. For example, the client is provided with an Excel template into which they enter the required data. Another option is the Opti.Tax Cloud, through which data can be requested directly. The client enters the data via the Opti.Tax Cloud interface. The tax adviser can then retrieve it. The data is automatically entered into the correct fields. Important information: hsp’s CbCR solution was developed for the German market. Whilst the international CbCR regulations are based on OECD guidelines, individual countries have implemented them differently at national level. Consequently, the requirements and conditions applicable in Germany differ from those in other countries.
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