On 9 February 2023, the German lower house of parliament (Bundestag) has approved a law to ratify the pending agreement with the USA on the exchange of CbC reports. The agreement was signed on 14 August 2020. The agreement will enter into force when Germany will inform U.S. that it has finished all necessary internal steps to come into force. Moreover, the exchange of information will not commence until a competent authority arrangement for exchange becomes operative.
Both parties have issued annual joint statement on spontaneous exchange of CbC reports. They desire to increase international tax transparency and improve access of their respective tax authorities to information regarding the global allocation of the income, the taxes paid, and certain indicators of the location of economic activity among tax jurisdictions in which multinational enterprise groups (“MNE Groups”) operate through the exchange of annual country-by-country reports (“CbC Reports”), with a view to assessing high-level transfer pricing risks and other base erosion and profit shifting related risks, as well as for economic and statistical analysis, where appropriate.
