Global Tax Adviser, June 07, 2016. The EU Council has formally agreed to adopt a directive on the exchange of tax-related information on multinational companies (country-by-country reporting to tax authorities). The rules will only apply to multinational enterprises (MNEs) with a minimum consolidated group revenue of EUR 750 million.
Under this directive, a reporting entity will have to submit certain information to the tax authorities of the member state where it resides on an annual basis, and for each tax jurisdiction where they do business. Relevant information will include:
This information must be reported, starting with the 2016 fiscal year, 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 and does not file a report, it must do so through its EU subsidiaries. Such "secondary reporting" will be optional for the 2016 fiscal year, but mandatory as from the 2017 fiscal year.
The member state where the reporting entity resides would then have to automatically exchange data with the other member states where the MNE is either resident or subject to tax through a permanent establishment in that other state.
The EU Council will also be adopting the EU Commission's recommendation on measures against tax treaty abuse, as well as the commission's external strategy for effective taxation.
These measure now need to be adopted into domestic law by each EU member state.
For more information, contact your KPMG adviser.
Information is current to June 07, 2016. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500