Russia to sign multilateral agreement on automatic exchange of tax reports
On July 1, 2015, the Convention on Mutual Administrative Assistance in Tax Matters (hereinafter referred to as the Convention) came into force in regard to Russia. The Convention lets parties automatically exchange information on tax matters.
The exchange of country-by country reports requires, according to the Convention, the signing of a separate agreement between the competent authorities of the parties.
The implementation of the agreement in practice means that the exchange of country-by-country reports will be based on the CbC Reporting Standard developed by the OECD, which sets the content and technical details of the information exchange procedure.
The signed agreement requires amendments to the Russian Tax Code concerning the creation of a mechanism for obtaining information by Russia’s Federal Tax Service, which is necessary to exchange information with the competent foreign authorities as part of Russia’s fulfillment of the agreement.
Russia’s joining the agreement will enable the Russian tax authorities to automatically receive from competent foreign authorities information on the allocation of income between members of multinational enterprise groups, which is necessary to assess the risks related to tax base erosion and profit shifting from Russia. The information obtained will increase the efficiency of tax oversight of prices in cross-border transactions. ■