The Multilateral Competent Authority Agreement on automatic exchange of Country-by-Country Reporting¹ was signed by the Federal Tax Service of Russia on 26 January 2017 within the framework of implementation of the Plan on counteracting tax base erosion and profit shifting (BEPS Plan); the Plan was approved by top public officials of “G-20 Group”. Currently over 50 countries have adopted the automatic exchange of Country-by-Country Reporting and joined the Multilateral Agreement.
Russia’s joining the Agreement conforms to the standard formulated under paragraph 13 of the BEPS Plan «Transfer Pricing Documentation and Country-by-Country Reporting».
Country-by-Country Reporting is the formalized document reflecting financial, tax and other key indicators of globally active corporations in states or territories where they operate. The subjects of the standard are the largest multinational corporations with consolidated annual revenue of over 750 million EUR.
According to the general rule the Country-by-Country Report is submitted by the parent company to the tax authority of the country where the company is a tax resident. The tax authority is obligated to share this report with tax authorities of the countries where the company’s subsidiaries are located.
The relevant Russian domestic law on Country-by-Country Reporting is required to put the Agreement in practice. In case of adoption of the draft law until the end of 2017 the exchange of Country-by-Country Reporting (including data for 2016) may start in 2018.
The list of corporations obligated to submit the Country-by-Country Reports may include the largest Russian commodity, industrial and financial holdings. According to the Information and Analytical system Globas-i® https://globas.credinform.ru/en-GB/home/auth covering data and offering analytics on Russian public and private companies there are over 70 companies whose consolidated annual revenues meet the requirements of the mentioned Agreement. Among these companies are internationally known corporations like Gazprom, Lukoil, Joint stock Company Mining and Metallurgical Company NORILSK NICKEL, Transneft, Severstal, AFK Sistema, Aeroflot.
Source: Credinform Russia
¹Background: The Convention on Mutual Administrative Assistance in Tax Matters (the “Convention”), by virtue of its Article 6, requires the Competent Authorities of the Parties to the Convention to mutually agree on the scope of the automatic exchange of information and the procedure to be complied with. Against that background, the Multilateral Competent Authority Agreement on the Exchange of CbC Reports (the “CbC MCAA”) has been developed, based on the Convention and inspired by the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information (the “CRS MCAA”) – concluded in the context of the implementation of the Common Reporting Standard. Source: OECD