Source: News Bharati English13 May 2016 20:57:21

Beijing, May 13: As part of continuing efforts to boost transparency by multinational enterprises (MNEs), India has signed a multilateral pact for automatic exchange of information on tax issues and developing new tools to tackle the tax evasion. For the automatic exchange of Country-by-Country reports ("CbC MCAA"), Canada, Iceland, Israel, New Zealand, India and the People’s Republic of China signed the Multilateral Competent Authority agreement, bringing the total number of signatories to 39 countries. The signing ceremony took place in Beijing, China.

The Organization for Economic Co-operation and Development (OECD) in a release yesterday said; India, Canada, Iceland, Israel, New Zealand and China signed the Multilateral Competent Authority agreement in efforts to boost transparency by multinational enterprises. The signing ceremony took place in Beijing, China. Other countries which have already signed the pact include Australia, France, Germany, Japan, Liechtenstein, Malaysia, Italy and the UK. With these six new signatories, the total number of tax-data-sharing nations has reached to 39.

According to the pact (OECD/G20 BEPS Project), all signatories are allowed to bilaterally and automatically exchange Country-by-Country Reports with each other. The OECD release added that it will help ensure that the tax administrations obtain a complete understanding of how the multinational enterprises structure their operations, also ensuring that the confidentiality of such information is safeguarded.

This ‘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.

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).