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EU: Member states agree to implement BEPS Action 13 CbCR by EU-wide Directive


Bob van der Made

In the public session of the ECOFIN Council meeting of March 8 2016, the EU's 28 finance ministers reached political agreement on a Dutch EU Council Presidency draft compromise text on the EU Commission's draft Council Directive amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation (between EU tax administrations), also known as 'DAC4'.

The political agreement concerns the proposed legislative amendment as part of the EU Commission's January 2016 EU Anti-Tax Avoidance Package in order to enable the coordinated integral implementation of G20/OECD BEPS Action 13 country-by-country reporting (CbCR) requirements in EU law.

DAC4 will apply to FY 2016 onwards. However, at the request of the German Finance Minister, it was agreed to defer by one year the Directive's specific provisions governing the secondary reporting mechanism (that is, mandatory and automatic CbCR by EU subsidiaries of parent multinational companies which are not EU tax residents) – these will apply from FY 2017 onwards. The Germans insisted on this amendment in order to ensure a level playing field between EU and non-EU countries and for the EU to be more in line with planned BEPS Action 13 implementation in other major territories like the US.

The text of DAC4 will be finalised by the Dutch six-monthly rotating EU Council Presidency to reflect the political agreement and then be translated into all 23 official languages of the EU.

Two EU legislative procedural formalities still need to be cleared before the Directive can also be formally adopted unanimously by the ECOFIN Council: first the lifting of the pending UK Parliament's reservation on the agreed compromise text and, secondly, the formal adoption by the EU Parliament's consultative Opinion on the Commission's DAC4 proposal dated April 28 2016.

The EU Parliament is expected to adopt its Opinion on DAC4 in its plenary session of May 10 2016.

DAC4 is expected to be formally adopted in the ECOFIN Council of May 25 2016, and formally enters into force 20 days after publication in the EU's Official Journal.

EU member states will then have 12 months to transpose the new rules into national law, by mid-2017.

Bob van der Made (

PwC EU Public Affairs-Brussels

Tel: +31 88 792 3696


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