The U.S. IRS has published the bilateral competent authority arrangement signed with South Korea on the exchange of Country-by-Country (CbC) reports. The agreement was signed 22 June 2017 and is effective from that date.
The arrangement provides that pursuant to the provisions of Article 28 (Exchange of Information and Administrative Assistance) of the 1976 income tax treaty between the two countries, each competent authority will automatically exchange CbC reports received from each reporting entity resident for tax purposes in its jurisdiction, provided that, on the basis of the information provided in the CbC report, one or more constituent entities of the MNE group of the reporting entity are resident for tax purposes in the jurisdiction of the other competent authority, or are subject to tax with respect to the business carried out through a permanent establishment situated in the other jurisdiction.
With respect to fiscal years beginning on or after 1 January 2016, CbC reports are to be exchanged as soon as possible and no later than 18 months after the last day of the fiscal year of the MNE Group to which the CbC report relates. With respect to fiscal years beginning on or after 1 January 2017, reports are to be exchanged no later than 15 months after the last day of the fiscal year.
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