• Country-By-Country Reporting Implementation
  • January 13, 2016 | Authors: Nicolas Andre; Siamak Mostafavi
  • Law Firm: Jones Day - Paris Office
  • As announced by the French Ministry of Finance few weeks ago, and in accordance with Action 13 of the OECD BEPS Project, Article 121 of the 2016 Finance Bill implements the country-by-country filing requirement.

    All multinational groups that (i) establish consolidated financial accounts and (ii) have an aggregate turnover in excess of EUR 750 million will have to file, within the 12 months following the end of their fiscal year, a specific report indicating the worldwide country-by-country allocation of the entities, activities, profits, tax liabilities, and other accounting and tax indicators (more details will be published in an administrative decree)

    Such report will have to be filed by (i) French corporations at the head of a group comprising foreign entities or branches, and (ii) French subsidiaries forming part of a group whose head is not subject to a similar country-by-country reporting requirement.

    Subject to reciprocity, the reports so filed could be exchanged by France within automatic exchange of information processes. The first reports will have to be filed by December 31, 2017 for fiscal year ending on December 31, 2016. Failure to file would give rise to a EUR 100,000 penalty.

    It should be noted that the above country-by-country filing requirement has been validated by the Constitutional Court, which mentioned, in its decision issued on December 29, 2015, that a fully public filing could be contrary to the French Constitution insofar as it would restrict the entrepreneurship freedom.