The US IRS on April 17 announced that it has entered into negotiations with Indonesian tax authorities for the exchange of country-by-country tax reports on multinational firms.
The data exchange would be effected through a bilateral competent authority arrangement that interprets existing tax agreements entered into between Indonesia and the US that allow for tax information exchange.
If an agreement is reached between the two nations, reporting burdens for large multinationals headquartered in the US and Indonesia would be simplified. An agreement would also make it easier for the US and Indonesia to determine if there is a risk that large foreign multinationals operating in their countries are engaging in tax avoidance through inappropriate transfer pricing or other means.
A worldwide scheme for the exchange of exchange of country-by-country reporting data on large MNEs was agreed to by nations in 2015 as a result of the OECD/G20 base erosion profit shifting (BEPS) plan.
The US has already concluded 35 such competent authority arrangements with other countries,
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