Exchange of information about multinational firms will be easier
Slovakia is the first V4 country to sign the agreement on country-by-country reporting.
Slovakia’s Financial Administration has obtained easier access to the information of US multinational companies. The representatives of Slovakia and the US signed a bilateral agreement on country-by-country (CbC) reporting on June 21, the TASR newswire reported.
The agreement sets the methods, deadlines and technical aspects of the automatic exchange of the CbC reports, which serve as a unique tool to identify the risks of transfer pricing and provide comprehensive information about the groups of multinational companies, as well as their structure, profits, activities, number of employees, and tax information.
The reports will subsequently be analysed, with the aim to identify any harmful practices that may lead to artificial transfer of profits to tax havens. Thanks to them, the Financial Administration will obtain a comprehensive picture of the multinational firms’ profits that flow into shell companies, and may thus prepare a targeted inspection, TASR reported.
The inking of the agreement is a significant step towards making the information about multinational companies accessible. The majority of these firms reside in the US.
“Based on these reports, our specialists will identify the risky subjects and transactions in order to check transfer pricing,” said Ladislav Hanniker, head of the Financial Administration’s department on fighting frauds and analysing the risks, as quoted by TASR.
Slovakia is the first country of the Visegrad Group (which includes the Czech Republic, Poland and Hungary) to sign the agreement, and also one of the top 10 countries across the globe that has managed to agree with the US on inking it in a record short time.
Apart from the USA, the Financial Administration will receive CbC reports from more than 50 countries in which the parent companies of the multinational groups reside, TASR reported.