Brussels, 01/03/2016 (Agence Europe) - In its latest compromise proposal, the Dutch Presidency of the Council of the EU stated that the information exchanged between tax administrations in the framework of country-by-country reporting (directive on administrative cooperation) may not lead to the disclosure of confidential commercial, industrial or professional information, or of any commercial procedures or information the disclosure of which could run counter to other public policy objectives.
Readers may recall that by virtue of the proposed modifications to the directive on administrative cooperation, the parent company of a group with a total consolidated turnover of €750 million or more would have to notify the tax administration of its country of residence of information of the turnover, profit before tax, tax paid, etc., for each country in which it has activities. The tax administrations would then exchange this information with each other (see EUROPE 11473).
In line with the OECD text, the legislative proposal provides for a secondary reporting mechanism, in the event that the ultimate parent of a group is not obliged to do so for given reasons. In such cases, another company of the group may be obliged to submit the report in its own country of residence.
In an earlier proposed compromise, the Dutch Presidency provided for a number of provisions in the event that this company of the group ('constituent entity') was unable to obtain the information needed from the parent company. If the parent company refuses to hand the information over, the constituent entity would then have to complete the report with the information available to it and inform the member state in which it is resident of this refusal. The member state in question would then be obliged to inform its peers of this refusal. Initially, the Presidency had proposed that this refusal be published by the member state in question, but this provision has been removed from the latest version of the compromise. The member states would also have the right to apply sanctions in this kind of scenario. This provision is reported to have been added by request of France and will be the subject of discussions at the meeting of the Committee of Permanent Representatives (Coreper) this Wednesday 2 March. The obligatory nature of this secondary reporting may also be raised at Coreper, with Germany calling for greater flexibility. This point could end up on the table of the finance ministers at the Ecofin Council of 8 March. The Presidency hopes for an agreement on this dossier in March. (Original version in French by Elodie Lamer)