Six new countries have signed OECD’s Multilateral Competent Authority (MCA) agreement for the automatic exchange of country-by-country reports to strengthen international fight against tax evasion by multinational enterprises (MNEs).
The new countries, which joined the agreement, include Canada, Iceland, India, Israel, New Zealand and China, bringing the total number of signatories to 39 countries.
Under the agreement, MNEs in these six countries will have to provide aggregate annual data in each jurisdiction they operate.
The data will cover the global allocation of income and taxes paid, as well as other indicators of the location of economic activity within the MNE group.
In addition, MNEs will also have to provide information on which entities do business in a particular jurisdiction and the business activities each entity involves in.
Country-by-country reports were proposed under the base erosion and profit shifting (BEPS) norms pioneered by the Organization of Economic Cooperation and Development (OECD).
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The norms have been designed to ensure that tax authorities gain a complete insight on how MNEs structure their operations, while safeguarding the confidentiality of such data.
"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," OECD said.