A new article requiring “country-by-country reporting” by the largest multinational enterprises was added to the Finance Bill for 2016. This country-by-country reporting requirement generally reflects the OECD base erosion and profit shifting (BEPS) recommendations, and was added by amendment to the Finance Bill for 2016.
Parent companies of multinational groups with annual revenue exceeding €750 million would be required to file a country-by-country report within 12 months following the end of the fiscal year. Failure to file this report would be subject to a €100,000 penalty.
The tax administration in France would then transmit the country-by-country reports to other countries where the group has its operations, via an information exchange mechanism provided for by the subject tax treaties, under the condition of reciprocity.
The country-by-country reporting requirement also would extend and apply to French subsidiaries of multinational groups whose “head company” is established in a country or territory that does not in fact transmit country-by-country reports to France. However, in such instances, these multinational groups could still be required to file the report through one of their other entities located in a country that collects such information and from which the other treaty partners—including France—could receive it.
Tax professionals with Fidal* have observed that the format of the country-by-country report is expected to be based on the international standard, and would be defined by decree. The pending bill provides that the new country-by-country reporting obligation would apply to fiscal years beginning on or after 1 January 2016, with the first reports to be filed by the end of 2017.
For more information, contact a tax professional with Fidal* in Paris:
Olivier Ferrari | +33 (0)1 55 68 14 76 | firstname.lastname@example.org
Olivier Schmitt | +33 (0)1 55 68 15 92 | email@example.com
* Fidal is a French law firm that is independent from KPMG and its member firms.
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