The US government has announced that it has reached competent authority agreements (CAAs) with Bermuda and Jersey to annually exchange country-by-country reports on the tax affairs of large multinational businesses.
Both CCA agreements were signed and became operative on December 7, the government said.
The agreements make it easier for the nations to obtain country-by-country reports on multinationals, which are designed to help tax administrations identify which multinationals operating in their country may be avoiding tax through transfer pricing or other means.
The CCAs also greatly simplify tax reporting burdens for multinationals headquartered in the US, Bermuda, and Jersey.
A US official recently said that the US will be unable by year-end to sign CAAs with every tax treaty partner for the exchange of country-by-country reports on multinationals. MNEs should begin to prepare for surrogate and local filing in jurisdictions without signed agreements with the US, the official said.
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