The US Internal Revenue Service (IRS) in collaboration with France’s competent authority, has issued a joint statement outlining plans for the spontaneous exchange of country-by-country (CbC) reports.

This initiative will apply to fiscal years starting in 2024 and 2025.

The Competent Authority of the United States and the Competent Authority of France 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 aµd profit shifting related risks, as well as for economic and statistical analysis, where appropriate.

Article 27 of the Convention between France and the United States for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital, done at Paris on 31 August 1994, as amended by the Protocols, signed at Washington on 8 December 2004 and at Paris on 13 January 2009 authorises exchange of information for tax purposes.

The Competent Authorities desire to exchange CbC Reports pursuant to the Convention and subject to the confidentiality and other protections provided for in the Convention, including the provisions limiting the use of the information exchanged under the Convention.

Each Competent Authority recognises that the jurisdiction of the other Competent Authority has in place the appropriate safeguards with respect to confidentiality and use of information exchanged and the infrastructure for an effective exchange relationship.

The Competent Authorities are negotiating a competent authority agreement and arrangement to allow for the automatic exchange of CbC Reports.

The Competent Authorities, without waiting for the negotiation’s conclusion, desire to exchange CbC Reports with respect to fiscal years of MNE Groups commencing on or after 1 January 2024 and before 1 January 2026.