An agreement between 31 countries has signed named Multilateral Competent Authority Agreement (MCAA) to increase the transparency in functioning of multinational enterprises (MNEs) by giving permission to automatic exchange of Country-by-Country reports by tax administrators.
Key Highlights about agreement
- The agreement plays an important landmark for implementation of Organization for Economic Co-operation and Development OECD/G20 BEPS Project and an extraordinary increase in cross-border cooperation on tax matters.
- It will help in implementation new reliable and fast transfer pricing reporting standards developed under Action 13 of the BEPS Action Plan.
- This agreement will enhance the transparency of multinational enterprises with easy exchange of information between the tax administrators and its operations and give a clear idea on the key indicators of the multinational businesses.
- While keeping the confidentiality of the structure and the operation of the MNEs the agreement will ensure that the tax administrations will understand their way easily.
- According to the OECD/G20 BEPS project 15 key actions are set out to reform the international tax framework.
- OECD/G20 BEPS (Base Erosion and Profit Shifting) project is more significant for the developing countries because they are deeply dependent on corporate income tax especially from MNEs.
- It also helps to cover the information about the entities or MNEs which are engaged with business in particular authority and activities and such information will be collected from the native country of the MNE group.
- Sectary General of OECD– Angel Gurria