Minor treaty actions
4.1
Minor treaty actions are generally technical amendments to existing treaties which do not impact significantly on the national interest.
4.2
Minor treaty actions are presented to the Committee with a one-page explanatory statement and are listed on the Committee’s website. The Committee can choose to formally inquire into these treaty actions, or accept them without a formal inquiry and report.
Lodgement of OECD Declarations for Common Reporting Standards and Country-by-Country Reports
4.3
These treaty actions relate to the Convention on Mutual Administrative Assistance in Tax Matters as amended by the Protocol amending the Convention on Mutual Administrative Assistance in Tax Matters.
4.4
The first treaty action obliges the implementation of the Organisation for Economic Cooperation and Development’s (OECD) Common Reporting Standard (CRS).
4.5
The second treaty action outlines timeframes for implementation of the OECD G20 Base Erosion and Profit Shifting Country-by-Country (CbC) Reporting Rules.
Common Reporting Standards
4.6
This treaty action is the lodgement of the Declaration on the Effective Date for Exchange of Information under the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information (the Unilateral Declaration). This would allow Australia to benefit from multilateral information exchange without having to undergo lengthy bilateral processes.
4.7
The Unilateral Declaration primarily aims to address tax evasion by individuals who are illegally concealing offshore investment income by failing to report it correctly. The CRS is a globalised standardised system developed by the OECD for the collection and reporting of financial account information on foreign tax residents to facilitate this exchange of information.
4.8
According to the Explanatory Statement, this treaty action will have a positive practical effect but a negligible legal and financial effect on Australia. No legislative changes are needed to implement the proposed treaty action.
4.9
The Unilateral Declaration would enter into force for Australia on the date of lodgement of a Third Party Note with the OECD through the Australian Embassy in Paris. Therefore, Australia could begin exchanging CRS information from 2018 with jurisdictions who have similarly lodged Notes.
Country-by-Country Reporting
4.10
The second proposed treaty action is the lodgement of the Declaration on the Effective Date for Exchange of Information under the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports.
4.11
The OECD Country-by-Country Reporting Rules enable national revenue authorities to exchange certain transfer pricing information provided to them by multinational enterprises headquartered in their jurisdictions.
4.12
Australia’s CbC reporting rules, which require large multinationals to report transfer pricing information to the Australian Taxation Office, were enacted on 11 December 2015 and apply to financial years commencing on or after 1 January 2016.
4.13
The proposed treaty action will enter into force for Australia on the date of lodgement of a Third Person Note delivered via the Australian Embassy in Paris. Therefore, Australia could begin to exchange CbC reports from 2018 with jurisdictions who have similarly lodged Notes.
4.14
The Explanatory Statement states that the treaty action will have a positive practical effect but a negligible legal and financial effect on Australia. No legislative changes are needed to implement the proposed treaty action.
The Hon Stuart Robert MP
Chair
4 September 2017