The Organisation for Economic Cooperation and Development (OECD) today announced that representatives of the governments of Canada, Iceland, India, Israel, New Zealand, and China signed an agreement for the automatic exchange of country-by-country (CbC) reports.
According to an OECD release, these six countries bring the total number of signatories of the multilateral competent authority agreement for the automatic exchange of CbC reports. The CbC multilateral competent authority agreement allows all signatories—bilaterally and automatically—to exchange CbC reports with each other, pursuant to Action 13 of the base erosion and profit shifting (BEPS) project. This will provide information for tax administrations concerning how multinational entities (MNEs) structure their operations. CbC 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. For instance, CbC reporting will cover information about which entities do business in a particular jurisdiction and the business activities of each entity.