UK and International Tax news

EU Member States Agree On Automatic Exchange Of Information On CbC Reports

Wednesday 16th March 2016

The European Commission has recently welcomed the agreement reached by member states for the automatic exchange of information on country-by-country reports of multinational companies, subject to UK scrutiny.

The new rules are a key part of the Anti Tax Avoidance Package adopted by the European Commission on 28 January 2016 [see our International Tax News item of 4 February 2016] which aims to combat tax avoidance and aggressive tax planning by imposing greater transparency requirements on multinational groups, and by obliging more information sharing among member states.

Under the rules, multinational groups will have to provide certain, tax related information on an annual basis for each tax jurisdiction in which they do business, including the amount of revenue, the profit or loss before income tax, the income tax paid and accrued, the number of employees, the stated capital, the retained earnings and the tangible assets of the group. The parent company will provide this information to the tax authorities of its country of establishment in Europe, where applicable; otherwise, EU-based subsidiaries will be obliged to request that information from their parent company.

Member states will also be required to share the information with the other member states concerned.

The EC will regularly receive the information it needs to monitor the implementation of the new rules and to ensure that member states are complying with their responsibilities.

Member states will have 12 months to transpose the new rules into national law after its entry into force, which is expected for spring 2016.

For more detail on the above contact Keith Rushen on 0207 486 2378.

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