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.
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