27/01/16-As part of continuing efforts to
boost transparency by multinational enterprises (MNEs), 31 countries signed today the Multilateral
Competent Authority Agreement (MCAA) for the automatic exchange of Country-by-Country reports. The signing ceremony marks an important
milestone towards implementation of the OECD/G20 BEPS Project and a significant increase in cross-border cooperation on tax matters.
The MCAA will enable consistent and swift implementation of new
transfer pricing reporting standards developed under Action 13 of the BEPS Action
Plan.
It will ensure that
tax administrations obtain a complete understanding of the way MNEs structure
their operations, while also
ensuring that the confidentiality
of such information is safeguarded.
“Country-by-Country
Reporting will have an immediate impact in boosting international co-operation
on tax issues, by enhancing the transparency of multinational enterprises’
operations,” said OECD Secretary-General Angel Gurría.
“Under this
multilateral agreement, information will be exchanged between tax
administrations, giving them a single, global picture on the key indicators of
multinational businesses. This is a much-needed tool towards the goal of
ensuring that companies pay their fair share of tax, and would not have been
possible without the BEPS Project.” (read the speech)
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.
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.
G20 Leaders
endorsed a wide-ranging BEPS package in November 2015 that marks 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.
With Country-by-Country reporting tax administrations where a company operates will get aggregate information annually, starting with 2016 accounts, 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.
The
information will be collected by the country of residence of the MNE group, and
will then be exchanged through exchange of information supported by such
agreements as signed today. First exchanges will start in 2017-2018 on 2016
information. In case information fails to be exchanged, the Action 13 report on
transfer pricing documentation provides for alternative filing so that the
playing field is levelled.
For more information about the MCAA Country-By-Country Reporting, see: www.oecd.org/tax/automatic-exchange/about-automatic-exchange/country-by-country-reporting.htm
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