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Peru Signs OECD's Multilateral Tax Convention

by Mike Godfrey,, Washington

30 October 2017

Peru is the latest signatory to the Multilateral Convention on Mutual Administration Assistance in Tax Matters, having become the 114th country party to the agreement at an October 25 signing ceremony.

The Convention is an instrument for international tax co-operation that was developed jointly by the OECD and the Council of Europe in 1988 and amended in 2010 to respond to the call by the G20 to align it to the international standard on exchange of information.

The Convention provides all forms of administrative assistance in tax matters: exchange of information on request, spontaneous exchange, automatic exchange (including pursuant to the OECD/G20 Standard for Automatic Exchange of Financial Account Information in Tax Matters, the Common Reporting Standard), tax examinations abroad, simultaneous tax examinations, and assistance in tax collection. It guarantees extensive safeguards for the protection of taxpayers' rights.

The OECD said, by signing the Convention, Peru has strongly reaffirmed its commitment to fight international offshore tax avoidance and evasion.

The Convention will allow Peru to rapidly expand its network of information exchange partners and to swiftly implement the transparency measures of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project, in particular the automatic exchange of Country-by-Country reports under Action 13, the OECD said.

Country-by-country reporting – the introduction of which is a minimum standard under the OECD's BEPS Action Plan, to tackle tax avoidance and evasion by multinational companies in particular – requires multinational enterprises 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 multinational group. It will also cover information about which entities do business in a particular jurisdiction and the business activities each entity engages in.

Through the Multilateral Convention, countries can agree a list of countries also party to the Convention that they will automatically share CbC reports with, to facilitate improved scrutiny of multinational companies' international tax affairs and in particular their transfer pricing arrangements. Such exchanges are intended to take place from June 2018.

TAGS: tax | business | tax avoidance | offshore | transfer pricing | Peru | G20 | Europe | Tax | BEPS

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