China said it has signed a multilateral agreement to share tax information on multinational companies, paving the way for it to join the fight on global tax avoidance.
China signed the country-by-country tax reporting agreement, along with Canada, India, Iceland, Israel and New Zealand, during a meeting of the OECD Forum on Tax Administration (FTA) in Beijing this week, bringing the number of countries that have signed the pact to 39.
Tax authorities will “obtain a more complete understanding of the way multinational enterprises structure their operations, while also ensuring that the confidentiality and the appropriate use of such information is safeguarded”, according to a statement issued on Friday, after the meeting.
The pact was in line with the commitment made by G20 leaders on Base Erosion and Profit Shifting, a programme to fight global tax avoidance.
Developed nations are trying to crack down on tax loopholes that allow multinational companies to shift profits from high tax countries to more relaxed jurisdictions.