Economic and Financial Affairs ministers from EU Member States have today reached an agreement regarding the automatic exchange of information (CbCR) on tax related information regarding multinational companies.

The Commission has welcomed the agreement, two months after they first presented their ambitious proposal. The new rules have been designed to provide tax transparency for multinational companies operating in a cross-border manner within the EU, and aims to provide Member States with the information they require to protect their tax bases and combat tax avoidance. These rules are seen as a direct response to the current global political and economic focus on corporate taxation and aggressive tax-planning practices. They are also designed to complement the implementation of the OECD guidelines on Base Erosion and Profit Shifting (BEPS).

Under these new rules and the terms of today’s agreement, multinational groups will be required to provide tax-related information on an annual basis for any business carried out in each jurisdiction within the EU. The information they will be required to provide includes:

  • number of employees
  • tangible assets of the group
  • retained earnings
  • stated capital
  • amount of revenue
  • profit or loss before income tax
  • income tax paid as well as accrued

After the rules entry into force which is expected in Spring 2016, Member States will have 12 months to transpose the rules into national law. Once in force, the Commission will continually monitor the flow of this information and ensure that all Member States are complying with their responsibilities.

Please contact Ramona Azzopardi on Ramona.azzopardi@whpartners.eu to find out more.

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