12/05/2016 - As part of continuing efforts to boost transparency by multinational enterprises (MNEs), Canada, Iceland, India, Israel, New Zealand and the People’s Republic of China signed today the Multilateral Competent Authority agreement for the automatic exchange of Country-by-Country reports ("CbC MCAA"), bringing the total number of signatories to 39 countries. The signing ceremony took place in Beijing, China.
The CbC MCAA allows all signatories to bilaterally and automatically exchange Country-by-Country Reports with each other, as contemplated by Action 13 of the BEPS Action Plan. It will help ensure that tax administrations obtain a complete understanding of how MNEs structure their operations, while also ensuring that the confidentiality of such information is safeguarded.
The OECD/G20 BEPS Project set out 15 key actions to reform the international tax framework and ensure that profits are reported where economic activities are carried out and value created. BEPS is of major significance for developing countries due to their heavy reliance on corporate income tax, particularly from MNEs.
Country-by-country reporting will require MNEs to provide aggregate information annually, in each jurisdiction where they do business, relating to the global allocation of income and taxes paid, together with other indicators of the location of economic activity within the MNE group. It will also cover information about which entities do business in a particular jurisdiction and the business activities each entity engages in.
G20 Leaders endorsed the wide-ranging BEPS package in November 2015, marking an historic opportunity for improving the effectiveness of the international tax system.
The package was the result of more than two years of discussion involving all OECD and G20 countries, as well as more than a dozen developing countries. Following endorsement of the BEPS measures, the focus has shifted to designing and putting in place an inclusive framework for monitoring BEPS and supporting implementation of the measures, with all interested countries and jurisdictions invited to participate on an equal footing.
BEPS implementation is a key subject of discussion during the meeting of the Forum on Tax Administration (FTA) in Beijing, which has drawn high-level tax officials from more than 50 countries and international organisations.
Beyond the MCAA signing ceremony Israel and the Russian Federation joined the 80 current signatories to the CRS Multilateral Competent Authority Agreement ("CRS MCAA"), the key international framework agreement for putting in place the automatic exchange on offshore financial accounts foreseen by the OECD Common Reporting Standard (CRS).
For more information about the Country-By-Country Reporting MCAA, see: www.oecd.org/tax/automatic-exchange/about-automatic-exchange/country-by-country-reporting.htm
Media queries should be directed to Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration (+33 6 26 30 49 23), Achim Pross, Head of the International Co-operation and Tax Administration Division (+33 6 21 63 27 67) or the OECD Media Office (+33 1 45 24 97 00).