UK and International Tax news

OECD And Automatic Sharing Of CbC Reporting Information

Thursday 28th January 2016

The OECD confirmed yesterday that 31 countries have signed the Multilateral Competent Authority Agreement (MCAA) for the automatic exchange of Country-by-Country reports.

This marks an important milestone towards implementation of the OECD/G20 BEPS Project, allowing for a significant increase in cross-border co-operation 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, which are to assist tax administrations obtain a complete understanding of the way MNEs structure their operations, while also ensuring that the confidentiality of such information is safeguarded.

With CbC 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 yesterday. 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.  

 

If you would like further information on the above, please contact Keith Rushen on 0207 486 2378.

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