Officials from six countries today signed a multilateral agreement that sets out the parameters for the automatic exchange of country-by-country reports on large multinational corporations.
China, India, Canada, Iceland, Israel, and New Zealand joined 33 other countries that have already signed the agreement, called the Multilateral Competent Authority agreement for the automatic exchange of Country-by-Country reports, which is designed to provide tax administrations with information needed to combat tax avoidance through transfer pricing. The signing took place in Beijing, which is currently hosting a meeting of tax officials.
The countries now need to take steps to ratify the agreement according to their local laws.
The multilateral agreement will give effect to standards developed in OECD/G20 base erosion profit shifting (BEPS) project concerning transfer pricing documentation and country-by-country reporting, agreed to in November 2015.
Under these standards, large multinationals must annually report to their country of residence specified information — such as revenues, profits, income tax paid, stated capital, accumulated earnings, number of employees, and tangible assets — relating to each jurisdiction in which the MNE does business. The information is then exchanged with other countries where the MNE operates through the multilateral competent authority agreement, tax information exchange agreements, and similar agreements.
The OECD said that BEPS implementation is a key topic being discussed at the Beijing meeting, called the Forum on Tax Administration, which has drawn tax officials from more than 50 countries and international organisations.
That is a good achievement in implementation of BEPS Project and the cbc reporting by all the countries mentioned above.