US Agrees To Exchange CbC Reports With Spain

by Ulrika Lomas, Tax-News.com, Brussels

28 December 2017

In a recent update, the Internal Revenue Service has announced that it has agreed a bilateral competent authority agreement with authorities in Spain to exchange country-by-country reports.

The agreement was signed on December 19, 2017, and became operational the same day.

The CbC report is one element of a new three-tiered standardized approach to transfer pricing documentation as proposed in Action 13 of the OECD's base erosion and profit shifting (BEPS) project. CbC reporting 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 MNE group. It also covers information about which entities do business in a particular jurisdiction and the business activities each entity engages in.

Under the new arrangement, the US and Spain will share information about multinationals operating in both countries, with the first reports to be exchanged in 2018.

Spain has signed the OECD's multilateral agreement on the exchange of CbC reports. However, the US is not a signatory to the agreement and is therefore pursuing bilateral deals.

According to its newly updated Country-by-Country Reporting Jurisdiction Status Table, the IRS has concluded competent authority agreements (CAAs) with 33 countries and is in negotiations towards CAAs with France, Germany, Hungary, India, Israel, Liechtenstein, Mauritius, Poland, and Slovenia.

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