Strategizing Multinational Tax Risks

The Multilateral Convention on Mutual Administrative Assistance in Tax Matters, as amended by the 2010 protocol, is effective for the following countries:

• March 1: Canada, New Zealand, Slovakia, South Africa
• June 1: Croatia

The Convention provides for the mutual exchange of tax information with other tax administrations.

Best Practice ideas:

1. Consistent coordination of responses to tax authorities by multinationals: As tax authorities share more information on a real-time basis, in accordance with the Multilateral Convention, global consistency is required for proper factual and risk determinations around the world.
2. Regional and Headquarter tax office coordination to issues: Processes and methodologies should be in place to ensure consistency and internal governance.
3. Tax (return) information reporting: More countries are adopting transfer pricing information reporting requirements, including transfer pricing methodology, and identification of relevant intercompany transactions in that country and/or other countries in accordance with their legislation.  A review of identifying current, and new information requirements should be established on a global master schedule ensuring internal coordination.
4. Tax information questionnaires: A process should be established to identify questionnaires received with a global methodology for proper governance.