According to an IRS announcement on its website, the competent authorities of U.S. and the Brazil have concluded an arrangement on the exchange of Country-by-Country Reports. The competent authority arrangement (CAA) for exchange of country-by-country reports is on the basis of a tax information exchange agreement (TIEA). The agreement was signed on 20 July 2017.
Under the arrangement, both countries intend 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. The country-by-country report is an annual report filed by large multinational groups to be used by tax administrations. The CbC report is one element of a standardized approach to transfer pricing documentation 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.
The report includes information regarding the group’s activities in each country in which it operates, including, revenue, and profit before tax, taxes paid, taxes accrued, number of employees, and other information on economic activity.
