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Council of the European Union adopts rules on the exchange of tax-related information by large multinationals

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27 May 2016

The Council of the European Union has adopted a directive on the reporting by multinational companies of tax-related information and exchange of that information between member states. The directive will implement Action 13 from the OECD Base Erosion and Profit Shifting (BEPS) project, on multinational country-by-country reporting, into a legally binding EU instrument.

Companies with total consolidated group revenue of at least €750 million will be required to report information, detailed country-by-country, on revenues, profits, taxes paid, capital, earnings, tangible assets and the number of employees. 

The information must be reported for the first time for the 2016 fiscal year.  Information must be reported to the tax authorities of the member state where the group’s parent company is tax resident.  If the parent company is not EU tax resident there is an option to disclose information through “secondary reporting” via its EU subsidiaries.  Such “secondary reporting”, although optional for the 2016 fiscal year, will be mandatory from 2017 onwards.

The reports will have to be filed within 12 months of the end of the relevant fiscal year.

Note that the directive is related to tax information exchange between competent tax authorities and reporting by companies to those tax authorities.  It is different to proposals made by the European Commission in April to require large multinationals to report publicly on the tax that they pay and where they pay it

Click for press release and directive on the European Council website.

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