In an effort to provide their tax administrations with more tools to combat corporate tax avoidance through transfer pricing, officials from 31 countries today signed an agreement setting out the parameters for automatic exchange of country-by-country reports on large multinational corporations.
The agreement — the Multilateral Competent Authority Agreement on the Automatic Exchange of Country-by-Country Reports — was signed by Australia, Austria, Belgium, Chile, Costa Rica, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Japan, Liechtenstein, Luxembourg, Malaysia, Mexico, Netherlands, Nigeria, Norway, Poland, Portugal, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Switzerland, and United Kingdom.
The countries now need to take steps to ratify the agreement according to their local laws.
The agreement is designed to give effect to base erosion profit shifting (BEPS) standards developed under action 13, concerning transfer pricing documentation and country-by-country reporting. Under these standards, agreed to in November 2015 by G20 and other nations, large multinationals must report to their country of residence specified information regarding each jurisdiction in which the group operates. Such information includes revenues, profits, income tax paid, stated capital, accumulated earnings, number of employees, and tangible assets.
That information will then be shared with other countries pursuant to the multilateral competent authority agreement, tax information exchange agreements, and similar agreements.
OECD Secretary-General Angel Guría said the signing of the agreement marks an important step in the next stage of the BEPS project, namely, implementation.
“Without effective implementation, we risk consigning the BEPS reports to books gathering dust on shelves,” Guría observed.
Guría said he looked forward to welcoming the next wave of signatories to the agreement.
Be the first to comment