The US and Japan have entered into a competent authority arrangement to exchange country-by-country reports on large multinationals, US Treasury announced October 25.
The agreement, signed October 10, will simplify tax reporting burdens of large multinationals headquartered in the two countries.
It will also allow the two countries’ tax authorities to more easily acquire information about large multinationals operating in their countries to help determine if the multinational might be engaging in tax avoidance through inappropriate transfer pricing or other means.
The country-by-country reporting system was established in the 2015 OECD/G20 base erosion profit shifting (BEPS) plan agreements.
Both the US and Japan are members of the “Inclusive Framework on BEPS,” a coalition now comprised of 122 countries that have pledged to implement country-by-country reporting and other “minimum standards” resulting from the BEPS project.
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