Country-by-Country Reporting to be established by 2017 in all EU jurisdictions
All companies within the EU with total income of over €750m will be obligated to send all data concerning monthly revenue, profits, tax paid, earnings, all tangible assets and the total number of people employed by the company.
This information shall be reported from the 2016 financial year onwards, however companies whose parent firm is not located in the European Union will have the option to disclose information via a scheme called ‘secondary reporting’ for any EU subsidiaries from year end 2016, which will become compulsory in 2017.
The Directive will assist and support Action 13 from the OECD Base Erosion and Profit Shifting (BEPS) project, regarding international country-by-country-reporting, to becoming a legally binding EU device.
The European Council also agreed to establish a list of non-cooperative jurisdictions in the EU, with which negotiations will commence in September this year.
The draft Directive builds on the 2015 OECD recommendations to address tax base erosion and profit shifting. It addresses scenarios where corporations and multinational conglomerates take advantage of discrepancies between national tax structures in order to avoid paying the correct taxes.
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