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

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

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

van-der-made.jpg

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 (bob.van.der.made@nl.pwc.com)

PwC EU Public Affairs-Brussels

Tel: +31 88 792 3696

Website: www.pwc.com/eudtg

more across site & shared bottom lb ros

More from across our site

The plan aims to improve the efficiency, transparency, and effectiveness of direct tax administration in India
Meanwhile, South Africa’s finance minister has accepted a court decision on suspending a VAT increase and US President Donald Trump mulls a 100% tariff on foreign films
Jaime Carey speaks about the benefits of his tax background, DEI values, the use of AI for a smarter legal practice, and other priorities that will define his presidency
Historically low levels of attrition over consecutive years made a ‘difficult decision’ necessary, PwC has reportedly said
WTS Global is also vetting new potential member firms in Algeria, Cote D’Ivoire and Benin, Kelly Mgbor tells ITR in an exclusive interview
The scope of qualifying pillar two tax credits could reportedly be broadened; in other news, hundreds of IRS appeals staff are to resign
For many taxpayers, the prospect of long-term certainty that a bilateral APA offers can override concerns about time, cost and confidentiality
Levine, who served under the Joe Biden administration, led the US’s negotiations on the OECD’s two-pillar solution
The deal to acquire ITR's parent company is expected to complete by the end of May 2025
JBS, the biggest meat company in the world, allegedly used Luxembourgian ‘mailbox companies’ to avoid taxes between 2019 and 2022
Gift this article