Canada has successfully initiated its first round of exchanges of country-by-country (CbC) tax reports of multinational enterprises (MNEs), Diane Lebouthillier, Minister of National Revenue, has announced.
In a statement issued on July 10, the Minister said: “With this important step, Canada joins our international partners, as one of 69 nations, in the first exchange of information on the revenue, profit, tax, and accumulated earnings information of large MNEs. Our participation in this global initiative will allow the Canada Revenue Agency to better understand these companies’ worldwide operations, and help ensure compliance with Canada’s tax laws.”
Lebouthillier added: “Thanks to CbC reporting, Canada now has automatic access to more information and data that will allow the Canada Revenue Agency to better risk assess large MNEs, those with an annual consolidated revenue of over EUR750m, and to better target its efforts and resources.”
She said that Canada is committed to combatting aggressive tax avoidance, and to “addressing base erosion and profit shifting (BEPS) that uses offshore structures and other types of aggressive tax avoidance.”
“This is why we are playing a leadership role internationally, and have made historic investments in Budget 2016, 2017, and 2018 to prioritize obtaining better data and improving our use of it to target our actions,” the Minister continued.
CbC reporting is part of a three-tiered approach to transfer pricing documentation (along with “master” and “local” files) developed under BEPS Action 13. According to the OECD, there are currently over 1,400 automatic exchange relationships in place among tax administrations committed to exchanging CbC reports.