OECD tax transparency deal receives international agreement

OECD tax transparency deal receives international agreement

OECD deal on country-by-country tax reporting signed by 31 nations

IN an effort to crack down on tax avoidance by multinationals, 31 countries yesterday agreed to sign an OECD agreement on tax co-operation, enabling the sharing of country-by-country reports.

The Multilateral Competent Authority Agreement (MCAA) was signed at the OECD’s headquarters in Paris yesterday, including signatures from the UK, France, Germany, Luxembourg and Ireland, the country where Google currently books its UK sales.

The agreement aims to help authorities like HMRC gain a “complete understanding of the way multinational corporations’ structure their operations.

Under the agreement, tax administrations of all 31 countries will receive aggregate information from multinationals annually, starting with their 2016 accounts. The countries involved will then be able to exchange information from 2017-1
Country-by-country reporting will also force companies to reveal information about particular jurisdiction they do business in and the business activities each entity engages in.

“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.”

The agreement is a positive step for the OECD and its BEPS project, the 15-point action plan that looks to reform the international tax framework.

The announcement follows the controversy surrounding Google’s £130m back tax payment to HMRC following a six-year investigation.

Margrethe Vestager, the EU’s competition commissioner recently told BBC Radio 4’s Today programme that the European Commission is willing to investigate Google’s tax dealings if somebody comes forward and makes a complaint.

“If we find that there is something to be concerned about if someone writes to us and says, well, this is maybe not as it should be then we will take a look,” said Vestager.

The European Commission has today laid out plans to crack down on multinational tax avoidance.

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

Professional Services Why Professional Services Firms Should Ditch Folders and Embrace Metadata

1y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

2y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine

Accounting Firms Turn Accounts Payable into a value-engine

1y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021

Making Tax Digital Digital Links: A guide to MTD in 2021

1y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource