OECD lists countries agreeing to country-by-country reporting exchange

The OECD today released an updated list of automatic exchange relationships established between tax authorities to implement country-by-country reporting under Action 13 of the OECD/G20 base erosion profit shifting (BEPS) plan.

The OECD also announced activation of automatic exchange relationships under the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports (CbC MCAA).

To date, 57 jurisdictions have signed the CbC MCAA and more are expected to sign, the OECD said.

A list outlining countries’ progress creating the domestic legal framework to carry out country-by-country reporting has also been made available. This list includes information on which jurisdictions will permit surrogate filing and voluntary parent surrogate filing.

Country-by-country reporting was established by OECD and G20 countries in 2015 BEPS plan agreements. Under the scheme, countries agreed to enact laws requiring the parent entity of large multinationals resident in their jurisdiction to report specified information regarding the MNE’s operations in each jurisdiction in which the group operates.

The information includes revenues, profits, income tax paid, stated capital, accumulated earnings, number of employees, and tangible assets. It is designed to help tax administrations determine if there is risk of tax avoidance by the multinational through transfer pricing or other means.

The BEPS plan calls for this report to then be shared by the government of residence with other countries where the multinational operates under rules set up either in the CbC MCAA or in competent authority agreements established between tax treaty partners.

The first exchanges of country-by-country reports between tax authorities will start in 2018. The first information to be exchanged will relate to the multinational’s tax year 2016.

According to the OECD, more than 700 automatic exchange relationships have been established among jurisdictions committed to exchanging country-by-country reports, and more such relationships are expected.

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