The European Commission today announced that an agreement was reached by EU Member States on the automatic exchange of tax-related financial information of multinational companies—known as country-by-country reporting—subject to UK parliamentary scrutiny.
The agreement was reached at today’s meeting of Economic and Financial Affairs ministers in Brussels, less than two months after the European Commission presented the proposal.
As explained in an EC release, the new rules:
The new rules are part of the anti-tax avoidance package adopted by the European Commission in January 2016 that aim at addressing tax avoidance and aggressive tax planning by imposing greater transparency requirements on multinational groups, and through more information sharing among EU Member States.
Under the rules, multinational groups will have to provide certain, tax-related information on an annual basis for each tax jurisdiction where they do business. The information includes:
The parent company will provide this information to the tax authorities of its country of establishment in Europe. Otherwise, EU-based subsidiaries will be obliged to request that information from their parent company.
EU Member States will also be required to share the information with the other Member States concerned.
Final adoption by the European Council is expected in May 2016. The EU 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.
Read a March 2016 report prepared by KPMG’s EU Tax Centre
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