Implementation of CbC Reporting in France, Italy and Poland

Action 13 of the OECD/G20 Base Erosion and Profit Shifting (BEPS) project has re-examined the current guidelines on transfer pricing documentation. The revised documentation standards were presented in October 2015 in the final report on Action 13[1] and follow a three-tier approach, whereby a Master File, a Local file and a Country-by-Country (CbC) report are indicated as the relevant element of a transfer pricing documentation.

The CbC reporting template proposed by the OECD requires multinational enterprises (MNEs) to indicate, inter alia, the amount of revenue (related and unrelated party), profits, income tax paid and taxes accrued, employees, stated capital and retained earnings, and tangible assets annually for each tax jurisdiction in which they operate. Additionally, for each entity belonging to the MNE, the main business activity(ies) should be identified.

Many countries, such as Australia, Denmark, France, Ireland, Italy, Japan, Mexico, the Netherlands, Poland, South Africa and Spain, have already implemented country-by-country report filing requirements into their national law. Many other countries have presented draft legislation or are currently considering the adoption of the OECD’s recommendations on CbC reporting.


The amended finance law for 2015 introduces a CbC reporting requirement in France, based on the abovementioned recommendations of the OECD’s final report on Action 13 of the BEPS project.

When. The CbC reporting provisions will be applicable for fiscal years that start on or after January 1, 2016.

French companies that fulfill all of the following four conditions will be required to file a CbC report:

  • Companies with consolidated accounts;
  • Companies that control, directly or indirectly, subsidiaries located abroad, or that have branches located abroad;
  • Companies with annual consolidated group revenue equal to, or in excess of, EUR 750 million; and
  • Companies not owned by another French entity that is already obligated to file a CbC report, or by a foreign entity that is obligated to file a CbC report due to a similar provision under its local legislation.

A French subsidiary of a foreign group also will be subject to French CbC reporting obligation in case it is held or controlled, directly or indirectly, by a foreign company not established in an “effectively transparent country” that would be subject to the French reporting requirement if it were established in France, provided that:

  • The French company is designated by the group to fulfill the CbC reporting requirement for the group, and has informed the French tax authorities of this; or
  • The French company cannot prove that any other entity of the group located in France or in a listed country has been designated to fulfill the reporting obligation for the group.

The government will publish a list of countries and territories that are regarded as “effectively transparent countries” by France, i.e. countries that have a similar CbC reporting requirement and have concluded an agreement on the automatic exchange of CbC reports with France. The government will specify the reporting format, which will be based on international standards.

What. The precise data to be included in the French CbC report will be defined by an administrative decree, but is expected to include economic, accounting and tax information as well as information on the activities of the groups’ entities and their location, in line with the final report on BEPS Action 13.

Others. The annual CbC report will have to be filed with the French tax authorities within 12 months after a group’s fiscal year end. The report will be exchanged automatically between affected tax administrations in accordance with applicable tax treaties and/or EU regulations. The information provided via the CbC reports will remain confidential.
Failure to comply with the CbC reporting measures will trigger penalties that will not exceed EUR 100,000.


The Stability Law for 2016 makes a number of significant changes to Italy’s tax law, including the introduction of CbC reporting requirements.

When. The changes described below are effective as from January 1, 2016.

Who. The new reporting requirements will apply to:

  • Groups with an Italian parent that have annual turnover exceeding EUR 750 million and that are required to submit group consolidated financial statements (i.e. companies that exceed two of the following thresholds for two consecutive years: i) total assets of EUR 20 million; ii) turnover of EUR 40 million; or iii) 250 employees); and
  • Italian subsidiaries controlled by a foreign company which is a resident in a country where CbC filing requirements have not been implemented, or in a country that does not carry out an actual exchange of CbC reports with Italy.

What. A CbC reporting obligation based on Action 13 of the OECD BEPS initiative will require MNEs to submit an annual report showing the amount of their revenue, gross profit, taxes paid and accrued and other indicators of actual economic activity. Detailed procedural guidelines (including the filing deadline for the report) will be issued by the Ministry of Economy and Finance by the end of March 2016.

Penalties ranging from EUR 10,000 to EUR 50,000 will apply for failure to submit the report, or for submitting an incomplete report.


The largest Polish corporate groups will be obligated to prepare and submit a CbC report to the tax authorities unless the domestic entity is a subsidiary of a foreign group.

When. The new Polish regulations on CbC reporting are binding as of January 1, 2016.

Who. Domestic entities whose consolidated revenues exceeded EUR 750 million in the preceding tax year will be obliged to submit a CbC report to the Polish tax authorities.

What. Taxpayers will be obligated to provide aggregated information on their taxable income, tax paid, their places of business, a list of related entities, country of their residence, main activity, number of employees and assets. Similar CbC reporting forms should be prepared by MNEs with foreign parent companies. In this case, in the presence of an agreement providing for the exchange of CbC reports, the tax authorities of the country of the foreign parent should share this information.

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