Russia, Malta, Mauritius, Hungary, Gabon, Indonesia, Lithuania sign tax agreement on exchange of country-by-country reports

In an effort to provide their tax administrations with tools to combat corporate tax avoidance through transfer pricing, officials from 7 more countries have signed an agreement setting out the parameters for automatic exchange of country-by-country reports on large multinational corporations.

Russia, Malta, Mauritius, Hungary, Gabon, Hungary, Indonesia, and Lithuania have signed the agreement, called the Multilateral Competent Authority Agreement for Country-by-Country Reporting (CbC MCAA), the OECD announced January 27.

Total signatories to the agreement are now 57, the OECD said.

The agreement is designed to give effect to OECD/G20 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 the OECD, G20, and other nations, large multinationals must report to their country of residence specified information regarding each jurisdiction in which the group operates, including revenues, profits, income tax paid, stated capital, accumulated earnings, number of employees, and tangible assets.

That information will then be shared with other countries’ tax administrations so that assessments can be made regarding whether is a risk the multinational is engaging in tax avoidance.

The CbC MCAA sets out uniform rules and procedures to implement the exchange of reports between nations.

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