Canada and five other countries have signed an international information-sharing deal that aims to boost tax transparency by multinational enterprises, the Organization for Economic Co-operation and Development (OECD) announced Thursday.
With the additions of Canada, China, Iceland, India, Israel, and New Zealand, a total of 39 countries have now signed onto the agreement which allows participating countries to bilaterally and automatically share reports designed to help tax authorities understand how multinationals structure their operations.
“Country-by-country reporting will require [multinationals] 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 [company],” reports the OECD, which announced the signing of the deal today in Beijing.
The agreement forms part of an effort to boost transparency by multinationals and enhance the international tax framework by ensuring that profits are reported, and taxed, where they are generated.