The US and the Cayman Islands are negotiating competent authority agreement for the bilateral exchange of country-by-country reports on large multinationals, the US IRS announced February 27.
Reaching agreement would help put into effect a 2015 deal reached by OECD and G20 nations under the base erosion profit shifting (BEPS) plan designed to give tax authorities a better picture of the activities of multinational firms.
It would also simplify reporting burdens of large US- and Cayman-headquartered multinationals.
The first country-by-country reports to be exchanged will relate to MNE’s fiscal years that begin on or after January 1, 2016. These reports are to be exchanged within 18 months following that last day of the MNE’s 2016 fiscal year. In succeeding years, the reports must be exchanged no later than 15 months after the last day of the fiscal year.
Information exchanged includes the MNE’s global allocation of income, taxes paid, and other information indicating multinational’s economic activity.
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