Country-by-country reporting for multinational enterprise groups

‘EU Legislation in Progress’ briefings aim to provide Members of the European Parliament with systematic and automatic analysis on all substantial proposals for EU legislation at every stage of the legislative procedure. Each contains an account of the purpose, content and legal aspects of the legislation proposed, in particular analysing what the legislation would change, as well as any previous legislation and the background. An overview of stakeholders’ views is also provided, as well as the opinions of national parliaments and the two advisory committees.

They are all made publicly available for stakeholders and the public.New proposals on transparency would provide tax authorities with comprehensive and relevant information on the activities of multinational enterprise (MNE) groups to help countries fight tax avoidance and aggressive tax planning. Action has been designed to be implemented at both international and European Union (EU) levels.

In particular, Action 13 of the OECD/G20 BEPS (Base erosion and profit shifting) action plan includes a requirement that MNEs provide all relevant governments with information on their global allocation of income, economic activity and taxes paid using a common template.

The European Commission has proposed to amend the Directive on administrative cooperation in the field of taxation (DAC) to implement BEPS action 13 on country-by-country reporting (CBCR) in the EU. CBCR would be added to the categories of information subject to automatic exchange of information between Member State tax administrations, under the DAC's exchange mechanism. As a tax measure, Parliament is only consulted and the proposal has to be adopted by the Council.

Author: Cécile Remeur

EP: EPRS: Briefing: EU Legislation in Progress http://epthinktank.eu/eu-legislation-in-progress/

ESO: Background information: Proposal for a Council Directive amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation http://www.europeansources.info/record/proposal-for-a-council-directive-amending-directive-2011-16-eu-as-regards-mandatory-automatic-exchange-of-information-in-the-field-of-taxation-3/

EP: EPRS: Plenary at a Glance, 04.05.16: Country-by-country-reporting to tax authorities http://www.europarl.europa.eu/RegData/etudes/ATAG/2016/582002/EPRS_ATA(2016)582002_EN.pdf

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