Strategizing International Tax Best Practices – by Keith Brockman

The EU Tax Avoidance Package contains a proposed amended EU Directive that would include CbC reporting as an automatic element of exchange of information between Member States.


  • The proposal expands the current Automatic Exchange of Information (AEOI) requirements in the EU.
  • The country-by-country (CbC) reporting would be encased in a legal instrument that would ensure certainty for companies within the EU.
  • “There is an urgent current demand for coordinated action in the EU on this matter of international political priority.”
  • On the basis of information in the CbC report, the mandatory CbC exchange would be accessible to those Member States in which “one or more entities of the MNE Group are either resident for tax purposes, or are subject to tax with respect to the business carried out through a permanent establishment of an MNE Group.”
  • Member States shall prescribe penalties in line with this proposal.
  • Member States shall adopt and publish, by 31 Dec. 2016, legislative provisions to comply with this Directive , and shall apply those provisions from 1/1/2017.

The proposal also addresses reporting by Surrogate Entities, although restricted to EU Member States.

This proposal pushes the EU initiative of being the global leader in post-BEPS implementation and providing direction for the rest of the world.  Accordingly, the proposal may be precedent setting for other jurisdictions and mandatory reading to understand CbC expectations and perceptions.


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