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EU Commission Launches Consultation on Corporate Tax Transparency including Options for Implementing CbC Reporting Requirements — Orbitax Tax News & Alerts

On 17 June 2015, the European Commission launched a public consultation on corporate transparency in connection to its Action Plan to reform corporate taxation in the EU. The consultation is looking for input on:

  • Who should be required disclose information; EU enterprises, non-EU enterprises, branches, subsidiaries?
  • To whom the information should be disclosed; tax authorities or also the wider public?
  • What types of information should be disclosed; tax rulings, country-by-country (CbC) reports, statements or other types of information?

In particular, two key questions are posed in relation to the new transfer pricing documentation guidelines and CbC reporting requirements developed as part of Action 13 of the OECD Base Erosion and Profit Shifting (BEPS) Project:

  • Should the Action 13 recommendations be implemented at the national or EU level; and
  • Should certain tax information be made available to the public?

In regard to these questions, five general options are put forward in the consultation document.

Transparency towards tax authorities:

OPTION A: No EU Action

Even if there is no EU action, some Member States may implement OECD BEPS Action 13 recommendations. This would allow tax authorities to obtain tax-related information and exchange that information with other participating countries. However, not all Member States may implement BEPS 13 – especially as not all EU Member States are OECD Members.

OPTION B: Implementation of BEPS 13 at the EU level

The EU would recommend or require, as recommended by BEPS 13, that enterprise disclose tax-related information on a country-by-country basis to the relevant tax authorities. Each ultimate parent enterprise filing a tax return with any of the relevant EU tax authorities would be covered. Its own worldwide consolidated operations would be reported.

Transparency towards the public:

OPTION C: Publication of anonymised/aggregated data by the EU tax authorities

The EU would recommend or require the disclosure by enterprises of tax-related information to tax authorities (possibly based on BEPS 13 recommendations). Moreover, aggregated or anonymised data would be made available to the public in order for the public to have access to tax-related information.

OPTION D: Public disclosure of tax-related information by either enterprises or tax authorities

The EU would require enterprises to disclose tax-related information on a country-by-country basis. The information would be made available to the public either directly (e.g. as part of their annual reporting obligations) or by national tax authorities in, for example, a public register. This option may consist in extending to all sectors the country-by-country reporting requirements currently in place for financial institutions.

OPTION E: Publicly available corporate tax policies

The Commission would require enterprises to report on their approach towards tax compliance and planning (tax management).

Comments must be submitted via an online questionnaire by 9 September 2015.

Click the following link for more information on the consultation.