31 jurisdictions signed a multilateral competent authority agreement on the exchange of country-by-country reports on January 27, 2016.

This agreement opens the door to close relationships between the signing jurisdictions in this area.

In its section 2, it indeed provides that « each competent authority will annually exchange on an automatic basis the CbC report received from each reporting entity that is resident for tax purposes in its jurisdiction with all such other competent authorities… in which… one or more constituent entities of the MNE group of the reporting entity are either resident for tax purposes, or are subject to tax with respect to the business carried out through a permanent establishment ».

It has nevertheless to be stressed that such exchange will become effective only between the tax authorities of the countries or terrritories in respect of which the convention on mutual administrative assistance in tax matters as amended by the Protocol (hereafter « the Convention ») is in force and is in effect, and which is a signatory to this agreement. Out of the 31 States that have signed the agreement, 3 of them have not yet ratified the Convention : Switzerland, Chile, and Liechstentein. A sa result, the automatic exchange of the CbC reports with these countries will be postponed until such ratification.

Section 3,2 of this agreement also provides that « a CbC report is first to be exchanged… as soon as possible and no later than 18 months after the last day of the fiscal year concerned ». Section 3, 3 of the agreement reduces this deadline to 15 months from the second fiscal year under report.

This CbC reporting compliance requirement has been introduced in France through Section 121 of the Finance Bill for 2016. The French resident parent companies subject to this obligation are those holding subsidiaries and/or permanent establishments abroad, issuing consolidated accounts, whose consolidated sales reach at least Euros 750 million, and which are not controlled by other companies subject themselves to such CbC reporting compliance requirement.

In France, these provisions are applicable to the years opened from January 1, 2016, and the corresponding declaration has to be digitally completed within 12 months after year-end. That means that all French companies in the scope and ending their Fys on December 31 are expected to file their CbC report for FY 2016 no later than December 31, 2017. And that such report will be exchanged with all other tax authorities concerned in the first half of 2018.

Read more :

http://www.oecd.org/tax/a-boost-to-transparency-in-international-tax-matters-31-countries-sign-tax-co-operation-agreement.htm