The acronym BEPS Project (Base Erosion & Profit Shifting) was coordinated by the Organization for Economic Co-operation and Development (OECD) with the main objective of studying measures to combat evasion and avoidance imposed through the artificial transfer of benefits to low-taxation countries.
The project was attended by the OECD member countries and the Group of 20 member countries – the G-20, so their deliberations represent a broad international coordination, with regard to the defense of the fiscal values of countries.
2. In 2015, the final reports of the 15 BEPS first project actions were approved. These reports present a comprehensive package of measures ranging from minimum standards for revisions to existing tax rules. In particular, the minimum standards have been agreed by the countries participating in the project to deal with situations where the failure of some countries creates negative effects on others, including adverse impacts on competitiveness.
Therefore, with respect to agreed measures, as a minimum standard, recognizing the need for fiscal rules between countries, all OECD members and G20 countries have committed themselves to a consistent application of these rules.
In this context, Country-by-Country Report (Country-by-Country Declaration), as provided for in the Action 13 report, establishes a new standard of documentation that is required of multinational groups to support, with information about Its global operations, the tax administrations of the countries, in particular the areas of selection and fiscal audits.
3. In view of the above, the proposal of the instruction that is submitted for public consultation is justified by the need to implement the commitments assumed by Brazil in the BEPS Project, which constitutes an important mechanism to deal with transparency in the activities of multinational economic groups.
4. Country-by-Country Declaration is an annual report by which these groups must provide the tax administration of the jurisdiction of residence with the power to control various information and indicators related to the location of their activities, the global allocation of income and Paid and taxes owed. The statement should also identify the jurisdictions in which the multinationals operate, as well as all members of the group that are in those jurisdictions and / or entities, including permanent establishments and the economic activities they perform. On the other hand, it was also established that the document should be shared between the countries in which the entities of the group are present, through agreements for the automatic exchange of tax information, although this aspect is not addressed in This IN.
5. Therefore, in order to obtain from the taxpayers residing in Brazil and to comply with the minimum standards agreed by the country at the international level, it proposes the draft Normative Instruction that establishes and regulates the delivery of compulsory said obligation Accessory.
6. With the Country-by-Country Declaration, the Brazilian tax authorities will have an important source of information on multinational groups, very useful for the analysis and identification of fiscal risks related to international taxation, as well as for training a base for statistical purposes. In this sense, the Country-by-Country Declaration will be an instrument to combat tax evasion, since the data received will facilitate the identification of entities that carry out large transactions artificially in low-tax local environments.
7. The statement is consistent with the current international scenario in the search for mechanisms to combat aggressive tax practices and the development of ways to discover gaps and remedies exploited by internationalized companies to reduce their tax burden or transfer their profits. And in addition to the integration of this international cooperation movement in the area of fiscal transparency, the measures reflect the aim of the Brazilian government in the defense of the interests of society and the protection of the national economy, promoting respect for free competition and the just and equal application of the rules of taxation.
8. The first “Country-to-Country Declaration” for the calendar year shall be required to be 2016 as recommended by the minimum level. Therefore, the publication of the Instruction is expected before the end of the year.