Multilateral Competent Authority Agreement on Country-by-Country Reporting (CbCR MCAA)

Summary

This document is the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports (CbCR MCAA), an international agreement between tax authorities (Competent Authorities) built on the OECD Convention on Mutual Administrative Assistance in Tax Matters. The Cayman Islands' Department for International Tax Cooperation, as the Competent Authority of the Cayman Islands, signed the Declaration to this Agreement on 21 June 2017 in Noordwijk, becoming a signatory jurisdiction. The Agreement itself does not directly regulate private businesses; rather it is a government-to-government framework under which signatory tax authorities agree to automatically exchange Country-by-Country (CbC) Reports filed by Reporting Entities of Multinational Enterprise (MNE) Groups within their own domestic legal frameworks.

• Automatic exchange commitment: Each Competent Authority commits to annually and automatically exchange CbC Reports it receives from Reporting Entities resident in its jurisdiction with other Competent Authorities that have the Agreement 'in effect' with it, where a Constituent Entity of the relevant MNE Group is tax resident or has a taxable presence.
• Definitions: The Agreement sets out definitions including MNE Group, Excluded MNE Group, Reporting Entity, and CbC Report.
• Confidentiality and safeguards: It includes confidentiality and data-safeguarding requirements.
• Consultation and suspension: It provides for consultation between Competent Authorities and temporary suspension of exchange in cases of significant non-compliance.
• Termination: It allows a Competent Authority to terminate its participation with a 12-month notice period.

For Cayman Islands compliance purposes, this document is best understood as the underlying international legal basis for the Cayman Islands' domestic CbCR regime, implemented through separate Cayman legislation and DITC guidance/regulations. MNE Groups and their Reporting Entities in the Cayman Islands should look to the domestic CbCR Regulations and DITC industry guidance for their actual filing obligations and deadlines; this Agreement itself does not impose filing duties directly on taxpayers.

Key obligations

• Each signatory Competent Authority (including the Cayman Islands DITC) must annually and automatically exchange CbC Reports received from Reporting Entities resident in its jurisdiction with other Competent Authorities for which the Agreement is 'in effect', where a Constituent Entity of the MNE Group is tax resident or taxable there
• Competent Authorities listed as non-reciprocal jurisdictions will send but not receive CbC Reports under the Agreement
• Competent Authorities must maintain appropriate safeguards to keep exchanged CbC Report information confidential and use it only for permitted purposes (transfer pricing risk assessment, BEPS risk assessment, economic/statistical analysis)
• A Competent Authority must consult the other Competent Authority before suspending exchange of information for significant non-compliance, and must provide written notice of such suspension
• A Competent Authority terminating participation must give written notice to the Co-ordinating Body Secretariat, with termination taking effect on the first day of the month following expiration of 12 months after the notice date
• The Co-ordinating Body Secretariat must notify all Competent Authorities of notifications received under the Agreement and of new signatories

Applies to

Competent Authorities (tax authorities of signatory jurisdictions), Multinational Enterprise (MNE) Groups, Reporting Entities

Deadlines

• 21 June 2017: Date the Cayman Islands Competent Authority signed the Declaration and became a signatory to the Agreement
• 12 months after notice of termination: Period after which a Competent Authority's termination of participation in the Agreement becomes effective (on the first day of the following month)