The French legislation on country-by-country (CbC) reporting includes a notification requirement that, depending on the facts in each instance, could require French entities subject to the notification rules to report on their annual corporate income tax returns whether they will be filing the CbC report or whether another entity will be filing the CbC report and, if so, the name and location of the entity that has been selected to file the CbC report.
With respect to the fiscal year ended 31 December 2016, French legal entities must file their tax return no later than 3 May 2017 (paper) or 18 May 2017 (electronically filed).
The CbC reporting notification requirements depend on the facts and circumstances, and there are three factors to be considered:
The form used to file the CbC report in France—form 2258-SD—is expected to be filed electronically, in the French language, no later than 31 December 2017.
It is the opinion of tax professionals with Fidal* that U.S. parented multinational entities (MNEs) are not to file a French notification at this time unless they have elected for a surrogate filing.
First, it is expected the United States and France will soon sign a bilateral qualified competent authority agreement (QCAA), rendering any notification unnecessary. In addition, notifying that the CbC report will be filed in the United States would be improper because the United States and France currently do not have a QCAA in place and, therefore, the United States is not a jurisdiction from which France could obtain the CbC report through an automatic exchange procedure.
In the unlikely event that the United States and France do not sign a QCAA by the time the U.S. CbC report is due, the MNE group could make a late French notification (i.e., identifying a surrogate jurisdiction), subject to a nominal penalty. Note that filing a current notification naming a surrogate jurisdiction, but amending later, would carry the same nominal penalty, but could result in additional scrutiny from the French tax authorities.
For more information, a tax professional with Fidal associated with KPMG's Global Transfer Pricing Services group or with KPMG in New York:
Nadia Sabin | +33 1 55 68 17 38 | firstname.lastname@example.org
Patrick Seroin | +1 (212) 954-2523 | email@example.com
* Fidal is a French law firm that is independent from KPMG and its member firms.
© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor 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 on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.