Faroe Islands
Overview of CbC reporting requirements
First reporting fiscal year: Commencing on or after 20 December 2019
Consolidated group revenue threshold: DKK 5.6 billion
Filing deadline: 12 months following the end of the reporting fiscal year
The domestic legal and administrative framework
It is recommended that the Faroe Islands take steps to amend legislation or otherwise clarify that an MNE Group should consider its requirement to file using the consolidated group revenue of its fiscal year immediately preceding a reporting fiscal year for comparison with the threshold. This recommendation remains in place since the 2019/2020 peer review.
It is recommended that the Faroe Islands take steps to amend legislation or otherwise clarify that there are no exemptions from the filing requirement for MNE Groups who meet the threshold requirement in the Faroe Islands. This recommendation remains in place since the 2019/2020 peer review.
It is recommended that the Faroe Islands take steps to amend legislation or otherwise clarify that a CbC report should be filed within 12 months of the end of the reporting period the report applies to. This recommendation remains in place since the 2019/2020 peer review.
It is recommended that the Faroe Islands take steps to implement procedures to ensure effective implementation of the filing requirement. This recommendation remains in place since the 2019/2020 peer review.
Faroe Islands has a legislative requirement for local filing which is in effect despite the Faroe Islands not yet meeting all of the consistency, confidentiality and appropriate use conditions. It is therefore recommended that the Faroe Islands take steps to ensure that local filing only occurs in the circumstances permitted under the minimum standard.
The exchange of information framework
Faroe Islands 2019/2020 peer review included a recommendation that the Faroe Islands take steps to have qualifying competent authority agreements in effect with jurisdictions of the Inclusive Framework which meet the confidentiality, consistency and appropriate use conditions and with which the Faroe Islands has an international exchange of information agreement in effect that allows for the automatic exchange of tax information. Faroe Islands has now activated relationships under the Multilateral Competent Authority Agreement for exchanging CbC reports and this recommendation is removed.
It is recommended that the Faroe Islands take steps to implement processes or written procedures to ensure that the exchange of information is conducted in a manner consistent with the terms of reference relating to the exchange of information framework. This recommendation remains in place since the 2019/2020 peer review.
Appropriate use of CbC reports
Faroe Islands does not yet have controls in place to ensure the appropriate use of CbC reports.
It is recommended that the Faroe Islands take steps to ensure that the appropriate use condition is met ahead of the first exchanges of information. This recommendation remains in place since the 2019/2020 peer review.