Reading the CbCR Data: What Multinational Reporting Reveals About Profit Shifting and Tax Risk

Country-by-Country Reporting (CbCR) has quietly become one of the most powerful transparency tools in international taxation. For large multinational enterprise (MNE) groups, it is no longer just a compliance obligation – it is a data set that tax authorities, policymakers and increasingly boards themselves use to assess where profits are booked, where activities happen, and where tax risk lies.

The OECD Corporate Tax Statistics 2025 provides the latest anonymised and aggregated CbCR statistics, offering a global view of how MNEs are reporting their income, taxes and economic activity.

For Caribbean and wider Latin America & the Caribbean (LAC) groups, this matters for two reasons:

1. You may already be in the dataset via your ultimate parent’s CbCR filing; and

2. Even if you are not yet in scope, this is the lens through which tax authorities will increasingly examine cross-border groups – including those headquartered in or investing into the region.

This article explains what the OECD’s CbCR data show, how tax authorities use it, where its limitations lie, and how boards and CFOs can turn CbCR from a compliance burden into a strategic risk management tool.

1. What CbCR is – and what it captures

CbCR was introduced under BEPS Action 13 as part of the transparency pillar of the OECD/G20 BEPS Project. All large MNE groups (consolidated revenues of at least EUR 750 million) must file a report with aggregate data on:

• Global allocation of income, profit and taxes paid, and

• Economic activity indicators (employees, tangible assets, etc.)
  for every tax jurisdiction where they operate

The primary purpose is to give tax administrations high-level transfer pricing and BEPS risk indicators – not to provide definitive proof of tax avoidance.

The Corporate Tax Statistics 2025 describes the core variables that jurisdictions report in anonymised, aggregated form:

• Number of CbCRs, sub-groups and entities

• Total unrelated and related-party revenues

• Profit or loss before income tax

• Income tax paid (cash) and current year income tax accrued

• Stated capital and accumulated earnings

• Number of employees

• Tangible assets (other than cash)

• Main business activities of each entity

These data ensure that all global activities of included MNEs are in scope, and – at minimum – allow a split between domestic and foreign activities, with many jurisdictions also providing a breakdown between investment hubs and other countries 

2. How broad is the CbCR dataset today?

The 2025 edition of Corporate Tax Statistics contains CbCR statistics on reports filed for fiscal year 2022. Key coverage numbers:

• 106 jurisdictions now have laws requiring mandatory CbCR filing for FY 2022

• 54 jurisdictions submitted anonymised, aggregated CbCR statistics to the OECD, and a further five reported that they received zero

• These data cover over 8,700 MNE groups, up from 3,628 in 2016.

Headquarters are concentrated but globally spread:

• The United States and Japan together host about one-third of MNE headquarters in the sample.

• The median reporting jurisdiction covers 68 MNEs, with wide variation from as few as 2 in some countries to nearly 2,000 in the United States.

For regulators and researchers, this dataset offers a richer global picture of MNE activity than consolidated financial accounts alone.

3. What the CbCR data say about profit shifting

3.1 Evidence of misalignment – profits vs people and assets

The latest CbCR statistics provide high-level indicators of base erosion and profit shifting (BEPS). The OECD explicitly warns that conclusions must be cautious – but some patterns are clear.

There is still misalignment between where profits are reported and where economic activity occurs:

• High-income jurisdictions account for 33% of employees and 35% of tangible assets, but only 28% of profits.

• Middle-income jurisdictions account for 31% of employees and 27% of tangible assets, but only 20% of profits.

• Investment hubs, by contrast, account for only 4% of employees and 12% of tangible assets, yet MNEs report 18% of total profits there.

In terms of taxes, high-income, middle-income and investment hubs account for 35%, 22% and 11% of tax accrued, respectively

This pattern – fewer people and assets, but a disproportionate share of profits in investment hubs – is a classic signature of profit shifting into low-tax or preferential regimes.

3.2 Profits and revenues per employee in investment hubs

The CbCR data also highlight stark differences in revenues and profits per employee across jurisdiction groups:

• In investment hubs, median revenues per employee are around USD 1.73 million, compared with:

  • USD 460,000 in high-income jurisdictions

  • USD 245,000 in middle-income jurisdictions

  • USD 170,000 in low-income jurisdictions

While some of this reflects genuine differences in capital intensity or productivity, the OECD notes that it is likely at least partly indicative of BEPS behaviour 

3.3 Signs of modest improvement

The 2025 report cautiously suggests modest reductions in BEPS activity relative to 2017:

• Median profits per employee in investment hubs have fallen by 18.1% relative to 2017.

• Median revenues per employee in investment hubs are down by about 3.0%.

• Median related-party revenues as a share of total revenue in investment hubs have fallen by 9.0% 

Investment hubs’ share of total MNE profits has dropped from 31.9% in 2017 to 18.9% in 2022, while their share of total MNE taxes paid has remained around 11% across all years

These trends may reflect a combination of:

• Implementation of BEPS measures (including CFC rules, interest limits and revised IP regimes)

• Behavioural changes by MNEs

• Broader macro events (COVID-19, inflation, major tax reforms in large economies).

The OECD is careful to emphasise that seven years of data still provide only limited evidence on long-term BEPS trends.

4. How tax authorities actually use CbCR

CbCR is not a magic bullet. The OECD repeatedly stresses that:

• CbCRs may only be used for high-level risk assessment – they cannot be used as standalone evidence that BEPS exists or as a substitute for substantive enquiries.

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• There is often a significant time lag between filing a CbCR and the conclusion of any transfer pricing audit arising from it.

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Feedback from tax administrations indicates that CbCRs are used to:

1. Identify MNE groups for possible audit,

2. De-select MNEs that appear low-risk, and

3. Help plan audits and enquiries more effectively.

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To support this, the OECD has developed several tools:

• CbCR risk assessment workshops for tax officials

• The CbCR Tax Risk Evaluation and Assessment Tool (TREAT)

• The Tax Risk Assessment Questionnaire (TRAQ) used in the International Compliance Assurance Programme (ICAP)

• A CbCR Effective Risk Assessment Handbook (2017).

For MNEs, the implication is clear: your CbCR profile is increasingly the first filter through which tax authorities view your group – shaping which questions they ask and where they focus their resources.

5. The limitations of CbCR – and why nuance is essential

The OECD devotes significant space to the limitations of CbCR data. Key points include:

• Aggregation and confidentiality

  • Data are aggregated at sub-group level and often further grouped to meet confidentiality standards. This makes it difficult to identify specific BEPS channels (e.g. no split between interest and royalties in related-party payments, and no explicit intangible asset data)

• Accounting basis differences

  • CbCRs are often (but not always) based on financial accounting data rather than tax reporting data. This can lead to discrepancies between CbCR figures and taxable income, and can affect comparability across jurisdictions

• Possible double-counting of profits and revenues

  • Intra-company dividends may be included in profit figures, leading to double counting and bias, especially when evaluating tax on repatriated profits.

  • Stateless entities and transparent entities (e.g. partnerships) may also lead to double counting or apparent “untaxed” stateless profits.

• Inclusion of CIT-exempt entities

  • Some CbCR filers (pension funds, university hospitals) may be corporate income tax-exempt, distorting the relationship between profits and taxes in aggregates.

• Trend analysis challenges

  • Early years involve a mix of voluntary and mandatory filers; guidance changes (e.g. exclusion of intra-group dividends from profit figures from November 2019) affect comparability over time.

  • Other major events (COVID-19, US Tax Cuts and Jobs Act, economic shocks) also influence results.

The OECD continues working with Inclusive Framework members to improve data quality and consistency, and expects the value of the dataset to increase over time.

For boards and CFOs, the message is this: tax authorities know these limitations – but they will still use CbCR as a crucial risk filter. Your task is to ensure your own internal understanding of what the data do and do not show is at least as sophisticated.

6. What CbCR reveals about your tax risk profile

From a corporate perspective, CbCR is a mirror. It shows, at a high level, whether your group’s footprint looks balanced and business-driven, or outsized and tax-driven.

Some of the key risk signals tax authorities – and increasingly investors and NGOs – may look for include:

1. High profits with low employees and tangible assets in certain jurisdictions

   • Especially in recognised investment hubs or low-tax regimes.

   • Ratios of profit or revenue per employee far above global norms can be red flags, even if partially justified by capital intensity.

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2. High share of related-party revenues

   • Particularly in jurisdictions where group treasury, financing, IP holding or management services are located.

   • The OECD notes that related-party revenues as a share of total revenue remain significantly higher in investment hubs, although these ratios have been declining.

3. Positive profits with low or negative tax accrued

   • The CbCR tables include specific views on sub-groups with positive profits and negative tax accrued, which can attract attention

4. Significant “stateless” profits

   • Where profits are reported without a clear jurisdiction of tax residence, raising questions about transparency and effective taxation

5. Disconnect between profits and people across the group

   • If headcount, tangible assets and profits do not broadly align across high-income, middle-income and investment hub jurisdictions, questions follow about value creation vs tax planning.

For Caribbean and LAC groups, this is especially important where the group uses:

• Regional or offshore holding companies,

• IP or financing entities in low-tax jurisdictions, or

• Cross-border structures inherited from earlier eras of more permissive tax planning.

7. A CbCR risk-management playbook for boards and CFOs

Rather than treating CbCR filing as a compliance chore, leading groups are using it as a central pillar of tax risk management. A practical approach might include:

7.1 Build an internal CbCR “shadow dashboard”

Before your report reaches tax authorities:

• Recreate your CbCR data internally in a dashboard that mirrors the OECD’s core indicators.

• Track profits, revenues, employees, tangible assets, and taxes by jurisdiction and region, and compute ratios such as profit per employee and revenue per employee 

This allows you to see what tax authorities see – and to identify unexpected outliers.

7.2 Align narrative, transfer pricing and CbCR

Ensure that:

• Your transfer pricing documentation and functional analyses tell the same story about where value is created as your CbCR data.

• Group disclosures (annual report, sustainability reports, investor presentations) are consistent with your CbCR footprint.

If CbCR suggests that a small office in an investment hub earns high profits with few people, your narrative and pricing policies must convincingly explain why.

7.3 Stress-test investment hubs and low-tax locations

For any jurisdiction showing:

• High profit / low employees and assets, or

• High related-party revenues,

ask:

• Is this supported by genuine functions and substance?

• Could this structure be challenged under BEPS rules or Pillar Two?

• How would our CbCR profile change if we relocated functions or simplified structures?

7.4 Integrate CbCR into your tax governance framework

CbCR should feature in:

• Tax risk registers and dashboards,

• Regular board and audit committee briefings,

• Scenario analyses linked to BEPS, Pillar Two and potential policy changes.

Given that tax administrations use CbCR for high-level audit selection, your governance should do the same – anticipating where your profile may attract questions and addressing issues proactively.

7.5 Prepare for continued evolution

The OECD is actively reviewing CbCR guidance and considering further refinements, including more detailed data on certain items 

Groups should expect:

• Expanded data requirements,

• Enhanced analytical tools in tax administrations, and

• Growing expectations from investors and civil society around tax transparency.

Early investment in data quality, systems, and internal analytics will pay off as CbCR continues to mature.

8. How Dawgen Global can help

Dawgen Global supports clients across Jamaica, the wider Caribbean and beyond in turning tax transparency into a strategic advantage rather than a vulnerability.

Our Tax Services team can help you:

• Diagnose your CbCR risk profile

  • Rebuild your CbCR data internally and benchmark key ratios against global patterns.

  • Identify jurisdictions and entities that may appear high-risk under BEPS and Pillar Two lenses.

• Align structures, substance and narrative

  • Review holding, IP and financing arrangements in light of CbCR signals and other BEPS data.

  • Ensure that transfer pricing, functional analyses and public disclosures support your CbCR footprint.

• Strengthen governance and readiness

  • Integrate CbCR into your tax risk management framework and board reporting.

  • Prepare for possible enquiries or cooperative compliance programmes that leverage CbCR data.

• Support strategic restructuring

  • Help simplify complex structures, relocate or consolidate functions, and design substance-based tax strategies that remain robust under BEPS, Pillar Two and evolving transparency expectations.

We combine deep familiarity with OECD methodologies and datasets with detailed knowledge of Caribbean and LAC business realities, enabling you to respond to global transparency with confidence.

Next Step!

If your group is filing – or will soon be filing – Country-by-Country Reports, your tax reputation and risk profile are already being shaped by the CbCR lens.

To understand what your CbCR data say about your group – and how to strengthen your position before tax authorities draw their own conclusions – connect with Dawgen Global’s Tax Services Team:

📧 Email: [email protected]
📱 WhatsApp (Global): +1 555 795 9071

At Dawgen Global, we help you make Smarter and More Effective Tax Decisions – including how you manage transparency, profit allocation and tax risk in a CbCR world.

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