On 7 December 2022, the Internal Revenue Service (IRS) published a joint statement with the competent authority of the United States of America and the competent authority of the French republic on the implementation of the spontaneous exchange of country-by-country reports for fiscal years beginning in 2022 and 2023.
Both parties 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.
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 January 1, 2022 and before January 1, 2024.
