Following the publication of the final reports of the BEPS project in October 2015 OECD member countries around the globe are working on implementing OECD country-by-country reporting into domestic legislation. The European Union is no exception and votes in favor of amending the directive on exchange of information to adapt to the OECD regime.
As a “separate” initiative, the European Commission has proposed a public EU country-by-country reporting. If implemented a large group of multinationals will have to prepare two sets of country-by-country reporting.
Are you also confused?
The following provides an overview of the status on these projects.
Non-public OECD Country-by-Country-reporting (EU directive on exchange of information)
On 25 May 2016, the Economic and Financial Affairs Council of the European Union (ECOFIN) voted in favor of the amendments to the EU directive on exchange of information, Directive 2011/16/EU (DAC4). The revision implements the recommendations of OECD non-public BEPS Action 13 on country-by-country reporting. The Directive will require EU Member States to implement a country-by-country reporting obligation in their national legislation within 12 months. The OECD country-by-country reporting shall only be exchanged between tax authorities and would not be made public.
Public EU Country-by-Country-reporting (EU Accounting Directive)
The European Commission has developed a proposal for a directive, Directive 2013/34/EU, which, if approved by the European Parliament and Council of Ministers, will require public country-by-country reporting of tax and other financial data by large companies in the EU. The proposed directive will amend the existing EU Accounting Directive. The draft of the new directive was released on 12 April 2016 and follows on the heels of the proposed changes to Directive 2011/16/EU (DAC4), to implement within the EU the OECD BEPS Action 13 country-by-country reporting requirements regarding the disclosure of information to tax authorities.
Main differences between OECD and EU Country-by-Country-reporting
The main differences between the proposed EU country-by-country reporting and the OECD country-by-country reporting regime are:
- The proposed EU regime will be public and will have to be filed with the relevant business register and made available on the company’s website for five years. OECD country-by-country reporting is private to tax authorities
- Not all elements included in OECD country-by-country reporting are included in the proposal for public EU country-by-country reporting (e.g. revenues are reported in total only and the disclosure does not include tangible assets or share capital)
- The wording of the items to be disclosed differs slightly between the two regimes
- EU country-by-country reporting is by country for EU Member States and for certain countries regarded by the Commission as having inadequate tax governance, but aggregates all other countries together. Under OECD rules, data has to be reported for each and every tax jurisdiction
- EU country-by-country reporting includes a narrative explanation at group level for differences between tax paid and current tax accrued. This is not required under OECD country-by-country reporting.
Jeg heter Eivind Faafeng Falck-Ytter og er advokat i Advokatfirmaet PwC. Min jobb er å finne gode løsninger for næringslivet, hovedsakelig knyttet til internasjonal selskapsbeskatning, internprising og grenseoverskridende restruktureringer.
Skatteverdenen blir stadig mer internasjonal og kompleks. Ved kjøp og salg av varer og tjenester utenfor Norges grenser må norske virksomheter håndtere skatteregler både i utlandet og i Norge. PwC har kontorer i de fleste land og vi har et unikt nettverk av skatterådgivere som kan bistå med spesialkompetanse på de fleste områder. Jeg håper mine innspill kan gi deg en alternativ innfallsvinkel til ulike temaer enn hva tradisjonelle nyhetsbrev gir.
My name is Eivind Faafeng Falck-Ytter, and I work as a lawyer in PwC Tax & Legal Services. I assist clients in finding solutions mainly within international corporate taxation, transfer pricing and international restructurings.
I hope my contribution to the blog can provide alternative perspectives as a supplement to traditional newsletters.
If you have any questions, comments or input, feel free to contact me!