Brussels, 06 October 2017
Interinstitutional files:
2016/0107 (COD)
WK 10931/2017 INIT
LIMITE
DRS
COMPET
ECOFIN
FISC
CODEC
WORKING PAPER
WORKING DOCUMENT
From:
General Secretariat of the Council
To:
Working Party on Company Law (CBCR)
N° prev. doc.:
ST 10525/17 + COR1
N° Cion doc.:
ST 7949/16 + ADD 1 + ADD 2
Subject:
Delegations comments received after the Working Party meeting on 20 of
September 2017
Delegations will find in Annex the comments received from the delegations after the Working Party
meeting on 20 of September 2017
WK 10931/2017 INIT
LIMITE
EN
ANNEX
General Comments on Presidency proposal (MT)
LV:
LV upholds its scrutiny reservation on the proposal. LV supports Council’s Legal Services
opinion on the proposal’s legal base.
DE:
We uphold our general scrutiny reservation as we still have not finished our decision-
making process.
UK:
On the Presidency compromise text, the UK would like to emphasise two points. We
believe it is vital that there are not dual reporting requirements. Affiliated undertakings that
already report under CRD IV need to be excluded from also having to report under PCBCR
obligations.
We also feel it is important that undertakings can publish the template they prepare for DAC
IV, as set out in Recital 8a – this is imperative in reducing the administrative burden for
business.
Presidency proposal (MT)
Proposal for a
DIRECTIVE OF THE EUROPEAN
PARLIAMENT AND OF THE COUNCIL
amending Directive 2013/34/EU as regards
disclosure of income tax information by
certain undertakings and branches
(Text with EEA relevance)
THE EUROPEAN PARLIAMENT AND
THE COUNCIL OF THE EUROPEAN
UNION,
Having regard to the Treaty on the
Functioning of the European Union, and in
particular
Article 50(1) thereof,
Having regard to the proposal from the
European Commission,
After transmission of the draft legislative act
to the national parliaments,
Having regard to the opinion of the
European Economic and Social Committee1,
1
Acting in accordance with the ordinary
legislative procedure,
Whereas:
(1)
In recent years, the challenge posed
by corporate income tax avoidance has
increased considerably and has become a
major focus of concern within the Union and
globally. The European Council in its
conclusions of 18 December 2014
acknowledged the urgent need to advance
efforts in the fight against tax avoidance
both at global and Union level. The
Commission in its communications entitled
‘Commission Work Programme 2016 - No
time for business as usual’
2 and
‘Commission Work Programme 2015 - A
New Start’3 identified as a priority the need
to move to a system whereby the country in
which profits are generated is also the
country of taxation. The Commission also
identified as a priority the need to respond to
our societies’ call for fairness and tax
transparency.
(2)
The European Parliament in its
UK:
resolution of 16 December 2015 on bringing
transparency, coordination and convergence We would like to underline that the
to corporate tax policies in the Union
4
Directive confirms that an affiliated or non-
acknowledged that increased transparency in affiliated undertaking may not be able to get
the area of corporate taxation can improve
access to this information from their ultimate
tax collection, make the work of tax
parent undertaking (if the UPU is located
authorities more efficient and ensure
outside of the EU).
increased public trust and confidence in tax
systems and governments.
In parallel to with the work undertaken
by the Council to fight corporate income
tax avoidance, it is necessary to enhance
public scrutiny of corporate income taxes
borne by multinational undertakings
carrying out activities in the Union, as this
is an essential element to further foster
corporate responsibility to contribute to
the welfare of our societies, to promote a
better informed public debate and to
regain the trust of citizens of the Union in
the fairness of the national tax systems.
Such public scrutiny can be achieved by
means of a report on income tax
information, irrespective of where the
ultimate parent undertaking of the
multinational group is established.
(3)
Following the European Council
conclusions of 22 May 2013, a review clause
2
was introduced in Directive 2013/34/EU of
the European Parliament and of the Council
5
requiring the Commission to consider the
possibility of introducing an obligation on
large undertakings of additional industry
sectors to produce, on an annual basis, a
country-by-country reporting taking into
account the developments in the
Organisation for Economic Cooperation and
Development (OECD) and the results of
related European initiatives.
(4)
Calling for a globally fair and
modern international tax system in
November 2015, the G20 endorsed the
OECD ‘Action Plan on Base Erosion and
Profit Shifting’ (BEPS) which aimed at
providing governments with clear
international solutions to address the gaps
and mismatches in existing rules which
allow corporate profits to shift to locations
of no or low taxation, where no real value
creation may take place. In particular, BEPS
Action 13 introduces a country-by-country
reporting by certain multinational
undertakings to national tax authorities on a
confidential basis. On 27 January 2016, the
Commission adopted the ‘Anti-Tax
Avoidance Package’. One of the objectives
of that package is to transpose into Union
law, the BEPS Action 13 by amending
Council Directive 2011/16/EU
6.
(5)
Enhanced public scrutiny of
corporate income taxes borne by
multinational undertakings carrying out
activities in the Union is an essential
element to further foster corporate
responsibility, to contribute to the welfare
through taxes, to promote fairer tax
competition within the Union through a
better informed public debate and to restore
public trust in the fairness of the national tax
systems. Such public scrutiny can be
achieved by means of a report on income tax
information, irrespective of where the
ultimate parent undertaking of the
multinational group is established.
(6)
The public should be able to
scrutinise all the activities of a group when
the group has certain establishments within
the Union. For groups which carry out
activities within the Union only through
subsidiary undertakings or branches,
3
operating subsidiaries and branches should
publish and make accessible the report of the
ultimate parent undertaking
to the extent
that the requested information is
available to the subsidiary or branch. If
the requested information is not available
the subsidiary or branch should explain in
the report the reasons of this omission.
However for reasons of proportionality and
effectiveness, the obligation to publish and
make accessible the report should be limited
to medium-sized or large subsidiaries
established in the Union, or branches of a
comparable size opened in a Member State.
The scope of Directive 2013/34/EU should
therefore be extended accordingly to
branches
opened,
and still operating, in a
Member State by an undertaking which is
established outside the Union
and which
has a legal form which is comparable to
the types of undertakings listed in Annex
I of Directive 2013/34/EU.
(6a) Multinational groups, and where
UK:
relevant, certain non-affiliated
undertakings, should provide the public
We appreciate the work that has already
with a report on income tax information
been done to define a non-affiliated
when they exceed a certain size over a
undertaking, however we think the definition
period of the last two consecutive
of non-affiliated undertaking may cause
financial years, depending on the
some confusion and lacks clarity. We
consolidated revenue of the group or the
suggest the following amendment to the
revenue of the non-affiliated undertaking. current proposal.
Having regard to Article 2(12) of
Directive 2013/34/EU, non-affiliated
Having regard to Article 2(12) of Directive
undertakings are intended to be stand-
2013/34/EU, non-affiliated undertakings are
alone entities which are not part of a
intended to be stand-alone entities which are
group. Given the wide array of
not a legal part of a the group but which are
accounting frameworks with which
under the common control of the group.
financial statements may comply, such
revenue should be defined as the net
turnover for undertakings governed by
the law of a Member State or the revenue
as defined in paragraph 2 of Article 48a
for other undertakings. Article 43(2)(c) of
Directive 86/635/EEC and Article 66(2) of
Directive 91/674/EEC provide definitions
as to the determination of the net
turnover of a credit institution or of an
insurance undertaking, respectively. For
other undertakings, the revenue should be
assessed in accordance with the financial
reporting framework on the basis of
which these financial statements are
4
prepared.
(6b) At the same time it is stressed that,
as concluded by the G20 and the OECD,
country-by-country reports will be helpful
for high-level transfer pricing risk
assessment purposes only. The
information in the Country-by-Country
Report on its own does not constitute
conclusive evidence that transfer prices
are or are not appropriate and that
information should not be used as a
substitute for a detailed transfer pricing
analysis of individual transactions and
prices based on a full functional analysis
and comparability analysis.
(7) In order to avoid double reporting for
the banking sector, ultimate parent
undertakings
and non-affiliated
undertakings which are subject to Directive
2013/36/EU of the European Parliament and
of the Council7 and which include in their
report prepared in accordance with Article
89 of Directive 2013/36/EU all its activities
and
, where appropriate, all the activities of
its affiliated undertakings included in the
consolidated financial statements, including
activities not subject to the provisions of
Chapter 2 of Title 1 of Part Three of
Regulation (EU) No 575/2013 of the
European Parliament and of the Council8,
should be exempted from the reporting
requirements set out in this Directive.
(8)
The report on income tax
information should provide information
concerning all the activities of an
undertaking or of all the affiliated
undertakings of a group controlled
consolidated by an ultimate parent
undertaking
or, depending on the
circumstances, concerning all the
activities of a non-affiliated undertaking.
The information should be based on the
reporting specifications of BEPS’ Action 13
and limited to what is necessary to enable
effective public scrutiny, in order to ensure
that disclosure does not give rise to
disproportionate risks or disadvantages
for
undertakings. For this reason, the list of
Presidency:
required information is exhaustive. The
Addition to reflect that additional voluntary
provisions of Chapter 10a of this Directive explanations or disclosures are not
do not affect the provisions regarding
prohibited.
annual financial statements and
5
consolidated financial statements.
(8a) In order to avoid administrative
UK:
burden, when preparing a report on
income tax information in compliance
We think the ability for entities to publish
with this Directive, undertakings should
their DAC IV report is vital in reducing the
be entitled to prepare the information on administrative burden on business and
the basis of the reporting specifications
therefore should have some operative
laid down in Annex III, Section III, parts provisions in the directive.
B and C of Council Directive 2011/16/EU
as amended. For this reason, the report
should specify the reporting framework
used. The report should
might in addition
include an overall narrative providing
explanations in case of material
discrepancies at group level between the
amounts of taxes accrued and the amounts of
taxes paid, taking into account
corresponding amounts concerning previous
financial years.
(9)
In order to ensure a level of detail
DK:
that enables citizens to better assess the
contribution of multinational undertakings to We propose to amend the text in recital 9 merely
welfare in each Member State, the
to clarify that:
information should be broken down by
• this part of the recital is concerning third
Member State. Moreover, information
country tax jurisdictions, and
concerning the operations of multinational
enterprises should also be shown with a high
• it is also allowed to disclose
level of detail as regards certain tax
disaggregated information.
jurisdictions which pose particular
Recital 9) In order to ensure a level of detail that
challenges. For all other third country
enables citizens to better assess the contribution
operations, the information should be given of multinational undertakings to welfare in each
in an aggregate number.
Member State, the information should be broken
down by Member State. Moreover, information
concerning the operations of multinational
enterprises should also be shown with a high
level of detail as regards certain
third country
tax jurisdictions which pose particular
challenges. For all other third country
operations, the information should
can be given
in an aggregate number.
(10) In order to strengthen responsibility
vis-á-vis third parties and to ensure
appropriate governance, the members of the
administrative, management and supervisory
bodies of the ultimate parent undertaking
or
non-affiliated undertakings which is
are
established within the Union and which has
have the obligation to draw up, publish and
make accessible the report on income tax
information, should be collectively
responsible for ensuring the compliance with
these reporting obligations. Given that
6
members of the administrative, management
and supervisory bodies of the subsidiaries
which are established within the Union and
which are controlled by an ultimate parent
undertaking established outside the Union or
the person(s) in charge of carrying out the
disclosures formalities for the branch may
have limited knowledge of the content of the
report on income tax information prepared
by the ultimate parent undertaking
or may
have limited ability to obtain such
information or report from their ultimate
parent undertaking, their responsibility to
publish and make accessible the report on
income tax information should be limited.
In
case this information or report is not
provided, the subsidiary undertakings
should publish and make accessible a
statement as to why the report on income
tax information could not be published
and made accessible.
(11) To ensure
public awareness on the
compliance of the reporting obligations by
the relevant undertakings, that cases of
non-compliance are disclosed to the public,
statutory auditor(s) or audit firm(s) should
check
state whether
a the report on income
tax information has been submitted and
presented
published, or not, in accordance
with the requirements of this Directive and
made accessible on the relevant
undertaking’s website or on the website of
an affiliated undertaking
, or on the website
of the register, within the time limits
established by this Directive. A statutory
auditor or audit firm should fulfil the
requirements set out in Article 48f of this
Directive to the extent of the information
provided by the undertaking governed by
the law of a Member State and to the
extent of the information being readily
available to the statutory auditor or audit
firm.
(12) This Directive aims to enhance
transparency and public scrutiny on
corporate income tax by adapting the
existing legal framework concerning the
obligations imposed on companies and firms
in respect of the publication of reports, for
the protection of the interests of members
and others, within the meaning of Article
50(2)(g) TFEU. As the Court of Justice held,
7
in particular, in Case C-97/96
Verband
deutscher Daihatsu-Händler9, Article
50(2)(g) TFEU refers to the need to protect
the interests of "others" generally, without
distinguishing or excluding any categories
falling within the ambit of that term.
Moreover, the objective of attaining freedom
of establishment, which is assigned in very
broad terms to the institutions by Article
50(1) TFEU, cannot be circumscribed by the
provisions of Article 50(2) TFEU. Given
that this Directive does not concern the
harmonisation of taxes but only obligations
to publish reports on income tax
information, Article 50(1) TFEU constitutes
the appropriate legal basis.
(12a) To ensure the full functioning of DE: We very much doubt why we need this
the internal market and a level playing
recital. We would ask to delete it.
field between the European Union and
third-country multinational enterprises,
the Commission should consider issuing
recommendations on how to ensure that
global dis-aggregation may be achieved
particularly in international fora.
(13) In order to determine certain tax
jurisdictions for which a high level of detail
should be shown, the power to adopt acts in
accordance with Article 290 TFEU should
be delegated to the Commission in respect of
drawing up a common Union list of these tax
jurisdictions. This list should be drawn up on
the basis of certain criteria, identified on the
basis of Annex 1 of the Communication
from the Commission to the European
Parliament and Council on an External
Strategy for Effective Taxation (COM(2016)
24 final). It is of particular importance that
the Commission carry out appropriate
consultations during its preparatory work,
including at expert level, and that those
consultations be conducted in accordance
with the principles laid down in the
Interinstitutional Agreement on Better Law-
Making as approved by the European
Parliament, the Council and the Commission
and pending formal signature. In particular,
to ensure equal participation in the
preparation of delegated acts, the European
Parliament and the Council receive all
documents at the same time as Member
States' experts, and their experts
systematically have access to meetings of
8
Commission expert groups dealing with the
preparation of delegated acts.
(14) Since the objective of this Directive
cannot be sufficiently achieved by the
Member States but can rather, by reason of
its effect, be better achieved at Union level,
the Union may adopt measures, in
accordance with the principle of subsidiarity
as set out in Article 5 of the Treaty on
European Union. In accordance with the
principle of proportionality as set out in that
Article, this Directive does not go beyond
what is necessary in order to achieve that
objective.
(15) This Directive respects the
fundamental rights and observes the
principles recognised in particular by the
Charter of Fundamental Rights of the
European Union.
(16) In accordance with the Joint Political
Declaration of 28 September 2011 of
Member States and the Commission on
explanatory documents
10, Member States
have undertaken to accompany, in justified
cases, the notification of their transposition
measures with one or more documents
explaining the relationship between the
components of a directive and the
corresponding parts of national transposition
instruments. With regard to this Directive,
the legislator considers the transmission of
such documents to be justified.
(17) Directive 2013/34/EU should
therefore be amended accordingly,
HAVE ADOPTED THIS DIRECTIVE:
Article 1
Amendments to Directive 2013/34/EU
Directive 2013/34/EU is amended as
follows:
(1) in Article 1, the following paragraph 1a
is inserted:
‘1a. The coordination measures
UK:
prescribed by Articles 2, 48a to 48
eg and 51 We would like clarity on the phrase ‘and still
shall also apply to the laws, regulations and operating’.
administrative provisions of the Member
States relating to branches opened
and still
operating in a Member State by an
undertaking which is not governed by the
law of a Member State but which is of a
legal form comparable with the types of
9
undertakings listed in Annex I.’
Article 2
shall apply to these branches to the extent
that Articles 48a to 48e and 51 are
applicable to such branches’;
(2) the following Chapter 10a is inserted:
‘Chapter 10a
Report on Income tax information
Article 48a
Definitions relating to reporting on income
tax information
1.
For the purposes of this Chapter, the
following definitions shall apply:
(1)
‘ultimate parent undertaking’ means
an undertaking which draws up the
consolidated financial statements of the
largest body of undertakings;
(2)
‘consolidated financial statements’
means the financial statements prepared by a
parent undertaking of a group in which the
assets, liabilities, equity, income and
expenses are presented as those of a single
economic entity;
(3)
‘tax jurisdiction’ means a State as
well as a non-State jurisdiction which has
fiscal autonomy in respect of corporate
income tax.
2.
For the purposes of Article 48b,
the following definition shall apply:
‘revenue’has the same meaning as:
(1)
the ‘net turnover’, for
DK:
undertakings governed by the law of a
Member State, and
We propose an amendment to Article 48a.2 (1)
as we believe that this is a more correct and
precise description and it is similar to the
description in recital (6a).
(1) the ‘net turnover’, for undertakings
falling
within the scope of this Directive governed
by the law of a Member State, and
(2)
the ‘revenue’ as defined by or
within the meaning of the financial
reporting framework on the basis of
which financial statements are prepared,
for other undertakings.
Article 48b
Undertakings and branches required to
report on income tax information
1.
Member States shall require ultimate
parent undertakings governed by their
national laws
which on their balance sheet
date exceeded for each of the last two
consecutive financial years a total
10
consolidated revenue of EUR 750 000 000
as reflected in their consolidated financial
statements and having a consolidated net
turnover exceeding EUR 750 000 000 as
well as undertakings governed by their
national laws that are not affiliated
undertakings and having a net turnover
exceeding EUR 750 000 000 to draw up
, and
publish
and make accessible a report on
income tax information
as regards the later
of the last two consecutive financial years.
on an annual basis.
Member States shall require undertakings
governed by their national laws that are
not affiliated undertakings and which on
their balance sheet date exceeded for each
of the last two consecutive financial years
a total revenue of EUR 750 000 000 as
reflected in their annual financial
statements to draw up, publish and make
accessible a report on income tax
information as regards the later of the last
two consecutive financial years.
The report on income tax information shall
be made accessible to the public on the
website of the undertaking on the date of its
publication.
1a.
Member States shall not apply the Presidency:
rules set out in paragraph 1 to non-
Need for consistency with language in
affiliated undertakings, ultimate parent
paragraph 3 of Art 48c where it says: “The
undertakings and their affiliated
information shall be attributed to each
undertakings where such undertakings,
relevant tax jurisdiction
on the basis of a
including their branches, are established
legal presence, the existence of a fixed
only within the territory of one single
place of business or of a permanent
Member State and in no other tax
business activity…”
jurisdiction.
2.
Member States shall not apply the
UK:
rules set out in paragraph 1 of this Article to
non-affiliated undertakings and ultimate
Our understanding is that this intends to
parent undertakings where such
exempt those entities that already disclose a
undertakings or their affiliated undertakings report under CRD IV. We believe the
disclose a report in accordance with are
current compromise does not cover all
subject to Article 89 of Directive
affiliated undertakings that are subject to
2013/36/EU of the European Parliament and CRD IV.
of the Council and encompass, in a country-
by-country
that report, information on
all
All affiliated undertakings, including those
their activities and all the activities of all
above the €750m threshold, that are subject
the affiliated undertakings included in the
to CRD IV should be excluded from having
consolidated financial statement of those
to produce a report. We suggest the
ultimate parent undertakings.
following addition to the current proposal.
Where an affiliated undertaking is required
11
to publish a report under Article 48b (3),
Member States shall not apply the rules set
out in paragraph 1 of this article if the
affiliated undertaking discloses a report in
accordance with Article 89 of Directive
2013/36/EU.
3.
Member States require the medium-
UK:
sized and large subsidiary undertakings
referred to in Article 3(3) and (4)
that which We would be very grateful for clarity on
are governed by their national laws and
exactly what report a subsidiary that exceeds
controlled by an ultimate parent undertaking the €750m threshold in its own right, will
which
on its balance sheet date exceeded
have to produce. Does the report consist of
for each of the last two consecutive
information on only itself or its branches if
financial years a total consolidated
relevant?
revenue of EUR 750 000 000 as reflected
in its consolidated financial statements has
a consolidated net turnover exceeding EUR
750 000 000 and which is not governed by
the law of a Member State, to publish
and
make accessible the
a report on income tax
information of that ultimate parent
undertaking on an annual basis
as regards
the later of the last two consecutive
financial years, to the extent that this
information or report is available to the
subsidiary undertaking. When this
information or report is not available, the
subsidiary undertaking shall request its
ultimate parent undertaking not governed
by the law of a Member State to provide it
with all information required to enable it
to meet its obligation.
In case this information or report is not
DE: …
If such subsidiary undertaking
provided, the subsidiary undertakings
exceeds the threshold set out in
shall publish and make accessible a
paragraph 1 FOR EACH OF THE LAST
statement as to why the report on income TWO CONSECUTIVE FINANCIAL
tax information could not be published
YEARS, it shall publish its own report on
and made accessible. If such subsidiary
income tax information as provided for
undertaking exceeds the threshold set out under paragraph 1 and 1a. …
in paragraph 1, it shall publish its own
report on income tax information as
In the current text we always refer to the
provided for under paragraph 1 and 1a.
thresholds to be met over two years. At this
The report on income tax information shall
pace we do not refer to it. We should avoid
be made accessible to the public on the date misunderstandings stemming from the fact
of its publication on the website of the
that at this place the reference of two years
subsidiary undertaking or on the website of
has been omitted.
an affiliated undertaking.
4.
Member States shall require branches
which are opened in their territories
and still
operated by an undertaking which is not
governed by the law of a Member State to
publish
and make accessible on an annual
12
basis the
a report on income tax information
of the ultimate parent undertaking
or the
non-affiliated undertaking referred to in
point (a) of
this paragraph 5 of this Article
as regards the later of the last two
consecutive financial years, to the extent
that this information or report is available
to the person(s) designated to carry out
the disclosure formalities referred to in
Article 48e(2). When this information or
report is not available, such person(s)
shall request the ultimate parent
undertaking not governed by the law of a
Member State or the non-affiliated
undertaking referred to in point (a) of this
paragraph to provide all information
required to meet their obligations. In case
this information or report is not provided,
the branches shall publish and make
accessible a statement as to why the
report on income tax information could
not be published and made accessible.
The report on income tax information shall
be made accessible to the public on the date
of its publication on the website of the
branch or on the website of an affiliated
undertaking.
Member States shall
not apply the first
subparagraph of this paragraph only to
branches which have net turnover
did not
exceeding
at least for each of the last two
consecutive financial years the net
turnover threshold defined by the law of
each Member State pursuant to Article 3(2).
5.
Member States shall apply the rules
set out in
this paragraph 4 only to a branch
only where the following criteria are met:
(a)
the undertaking
that which opened
and still operates the branch is either an
affiliated undertaking of a group which is
controlled by an
whose ultimate parent
undertaking
is not governed by the law of a
Member State and which
on its balance
sheet date exceeded for each of the last
two consecutive financial years a total
consolidated revenue of EUR 750 000 000
as reflected in its consolidated financial
statements has a consolidated net turnover
exceeding or an undertaking that is not an
affiliated undertaking and which has a net
turnover exceeding
on its balance sheet
13
date exceeded for each of the last two
consecutive financial years a total revenue
of EUR 750 000 000
as reflected in its
financial statements;
and
(b)
the ultimate parent undertaking
referred to in point (a) does not have a
medium-sized or large subsidiary
undertaking as referred to in paragraph 3.
6.
Member States shall not apply the
rules set out in paragraphs 3 and 4 of this
Article where a report on income tax
information drawn up in accordance with
consistently with Article 48c
and:
(a)
is made accessible
:
(i)
to the public on the website of the
ultimate parent undertaking
not governed
by the law of a Member State or of the
non-affiliated undertaking not governed
by the law of a Member State
;
(ii)
in at least one of the official
languages of the Union;
(iii) within a reasonable period of time,
which shall not exceed
12 months after the
balance sheet date
of the financial year for
which the report is drawn up; and
(b)
where the report identifies the name
and the registered office of the
a single
subsidiary undertaking or
the name and the
address of the
a single branch governed by
the law of a Member State which has
published the
a report in accordance with
Article 48d(1).
7.
Member State
s shall
may require
SE:
subsidiaries
and or branches not subject to
The provision is unclear on how MS shall
the provisions of paragraphs 3 and 4 to
obtain the knowledge that a subsidiary or a
publish and make accessible the
a report on branch has been established for the purpose
income tax information where such
of avoiding the reporting requirements set
subsidiaries or branches have been
out in the Chapter.
established for the purpose of avoiding the
reporting requirements set out in this
Chapter.
Article 48c
Content of the report on income tax
information
1.
The report on income tax
information shall include information
relating to all the activities of the
non-
affiliated undertaking and
or the ultimate
parent undertaking, including activities
those of all affiliated undertakings
consolidated in the financial statement in
respect of the relevant financial year.
14
2.
The information referred to in
paragraph 1 shall
be as follows comprise the
following:
(-a) the name of the ultimate parent
undertaking or the non-affiliated
undertaking, financial year concerned
and the currency used;
(a)
a brief description of the nature of
the activities;
(b)
the number of employees
which is
the average number of employees during
the financial year;
(c)
the
revenues which are: amount of
the net turnover, which includes the turnover
made with related parties;
(i)
the sum of the net turnover, other
operating income, income from
participating interests, excluding
dividends received from affiliated
undertakings, income from other
investments and loans forming part of the
fixed assets, other interest receivable and
similar income as listed in Annexes V and
VI of this Directive, or
(ii)
the income as defined by or within DK:
the meaning of the financial reporting
framework on the basis of which financial We propose an amendment to clarify the text in
statements are prepared excluding value
Article 48c(2)(c)(ii):
adjustments and dividends received from
affiliated undertakings;
(ii) the income as defined by or within the
meaning of the
a financial reporting framework
other than this Directive on the basis of which
financial statements are prepared excluding
value adjustments and dividends received
from affiliated undertakings;
(d)
the amount of profit or loss before
income tax;
(e)
the amount of income tax accrued
in Presidency:
the (current year)
, during the relevant
Language consistency with other points of
financial year which is the current tax
the same paragraph.
expense recognised on taxable profits or
losses of the financial year by undertakings
and branches resident for tax purposes in the
relevant tax jurisdiction;
(f)
the amount of income tax paid
on
cash basis which is the amount of income
tax paid during the relevant financial year by
undertakings and branches resident for tax
purposes in the relevant tax jurisdiction; and
(g)
the amount of accumulated earnings.
For the purposes of point (c) of the first
subparagraph the revenues shall include
15
transactions with related parties.
For the purposes of point (f) of the first
subparagraph taxes paid shall include
withholding taxes paid by other
undertakings with respect to payments to
undertakings and branches within a
group.
For the purposes of point (g) of the first
DE:
For the purposes of point (g) of the
subparagraph the accumulated earnings
first subparagraph the accumulated
shall mean the sum of the profit brought
earnings shall mean the sum of the profit
forward which was not decided for
OF THE FINANCIAL YEAR brought
distribution to members as of the end of
forward which was not decided for
the relevant financial year and the profit
distribution to members as of the end of
for that financial year which was not
the relevant financial year and the profit
distributed. With regard to branches,
for that financial year which was not
accumulated earnings shall be reported
distributed. …
by the undertaking which opened a
branch.
We still believe that an annual report should
publish those profits which have been made
in the financial year about which a report has
to be made and which have not been
distributed – but not as the current text the
sum of- all- non-distributed profits of all
financial years of the past.
2a.
Member States shall permit the
information listed in paragraph 2 to
correspond to the reporting specifications
referred to in Annex III, Section III, Parts
B and C of Directive 2011/16/EU.
3.
The report shall present the
UK:
information referred to in paragraph 2
or 2a
separately for each Member State. Where a
We are concerned that these provisions
Member State comprises several tax
constitute a defensive measure. Discussions
jurisdictions, the information shall be
are taking place in the EU Code of Conduct
combined at Member State level.
Group to consider the use of defensive
measures. That discussion has not yet
resulted in any agreed approach. Therefore,
it seems inappropriate to include a defensive
measure prior to agreement or even
comprehensive discussion in the forum with
primary responsibility for this issue.
In any case, we believe that any defensive
measure (if agreed) should be effective,
proportionate and targeted. This defensive
measure does not recognise the varied
reasons why a jurisdiction may be
blacklisted. We suggest deleting these
provisions entirely. Obviously, if global
disaggregation is agreed to then this problem
is resolved.
The report shall also present the information
16
link to page 18
referred to in paragraph 2
or 2a of this
Article separately for each tax jurisdiction
which, at the end of the previous financial
year, is listed in the common
EU nion list of
non-cooperative jurisdictions for tax
purposes1 certain tax jurisdictions drawn up
pursuant to Article 48g, unless the report
explicitly confirms, subject to the
responsibility referred to in Article 48e
below, that the affiliated undertakings of a
group governed by the laws of such tax
jurisdiction do not engage directly in
transactions with any affiliated undertaking
of the same group governed by the laws of
any Member State.
The report shall present the information
referred to in paragraph 2
or 2a on an
aggregated basis for other tax jurisdictions.
The information shall be attributed to each
SE:
relevant tax jurisdiction on the basis of
the
The meaning of the term “legal presence” is
legal presence, the existence of a fixed
unclear. It is also unclear in the article what
place of business or of a permanent business is meant by the wording “can give rise to
activity which, arising from the activities of income tax liability”. The wording suggests
the group
or non-affiliated undertaking,
that is something different that factual tax
can give rise to income tax liability in that
liability. In which situations is this
tax jurisdiction.
applicable?
Where the activities of several affiliated
undertakings can give rise to a tax liability
within a single tax jurisdiction, the
information attributed to that tax jurisdiction
shall represent the sum of the information
relating to such activities of each affiliated
undertaking and their branches in that tax
jurisdiction.
Information on any particular activity shall
not be attributed simultaneously to more
than one tax jurisdiction.
3a.
Member States may allow certain
DE:
information required to be disclosed by
paragraphs 2 and 3 of this Article to be
Member States may allow certain
omitted when its nature is such that it
information required to be disclosed by
would be seriously prejudicial to the
paragraphs 2 and 3 of this Article to be
commercial position of the undertakings
omitted when its nature is such that it
to which it relates, including when only a would be seriously prejudicial to the
single affiliated undertaking operates in a commercial position of the undertakings
tax jurisdiction which is not listed in the
to which it relates, including when only
EU list of non-cooperative jurisdictions
ONE PROJECT IS REALIZED IN A
1
List adopted by the Council on [
lawyer-linguists: please add the reference].
The precise language of this footnote shall be adapted when the list is adopted by the Council.
List as referred to in the Conclusions of the Council of the European Union of 25 May 2016 and 8 November
2016.
17
for tax purposes.
TAX JURISDICTION OR a single
affiliated undertaking operates in a tax
jurisdiction which is not listed in the EU
list of non-cooperative jurisdictions for
tax purposes.
Sometimes there is no subsidiary but
another body which handles a project. This
should be exempted as well.
DK:
With the aim not to increase burdens for
undertakings covered by the CBCR
obligations Denmark cannot support the
amendment that requires undertakings to
obtain an administrative authorization prior
to omitting information in the CBC report.
Denmark supports however that an
undertaking must disclose in the CBC
report, if any information is omitted and give
a detailed reasoning for the omission. It
seems to us that no MS has asked for an
amendment as the one proposed in para
3a.
SE:
MS may allow certain information to be
omitted in the report. The article is unclear if
it requires approval from both MS if the
information concerns transactions between a
subsidiary which is resident in a MS and a
subsidiary resident in another MS or if it is
sufficient with the approval from one of the
MS.
Any such omission shall be subject to
prior administrative or judicial
authorisation for a period of one year,
which may be renewed, and disclosed in
the report. The report shall include a
detailed account of the basis for any
exemption granted under this paragraph.
4.
The report shall
may include
, where
applicable at group level
, an overall
narrative providing explanations on material
discrepancies between the amounts disclosed
pursuant to points (e) and (f) of paragraph 2,
if any, taking into account if appropriate
corresponding amounts concerning previous
financial years.
5.
The report on income tax
18
information shall be published and made
accessible on the website in at least one of
the official languages of the Union.
6.
The currency used in the report on
income tax information shall be the currency
in which the consolidated financial
statements
of the ultimate parent
undertaking or the annual financial
statements of the non-affiliated
undertaking are presented. Member States
shall not require this report to be published
in a different currency than the currency
used in the financial statements.
However, in the case mentioned in
the second subparagraph of Article
48b(3), the subsidiary undertaking shall
publish the report in the currency in
which it publishes its annual financial
statements.
7.
Where Member States have not
adopted the euro, the threshold referred to in
Article 48b(1) shall
may be converted into
the national currency
. by
Such conversion
must applying the exchange rate as at
[Publications Office- set the date = the date
of the entry in force of this Directive]
published in the Official Journal of the
European Union and by
may increase
increasing or
decrease the thresholds
decreasing it by not more than 5 % in order
to produce a round sum in the national
currencies.
The thresholds referred to in Article 48b(3)
and (4) shall be converted to an equivalent
amount in the national currency of any
relevant third countries by applying the
exchange rate as at
[Publications Office - set
the date = the date of the entry in force of
this Directive], rounded off to the nearest
thousand.
8.
The report shall specify whether it
was prepared in accordance with
paragraph 2 or 2a of this Article.
Article 48d
Publication and Accessibility
1.
The report on income tax
DE: …
ANY SHORTER PERIOD FOR
information
or the statement mentioned in THE PUBLICATION OF FINANCIAL
Article 48b shall be published
within 12
STATEMENTS SHALL NOT APPLY
months after the balance sheet date of the WITH REGARDS TO THE REPORT.
financial year for which the report is
drawn up as laid down by the laws of each We suggest to clarify that any deadlines for
Member State in accordance with Chapter 2 financial statements under other directives
19
of Directive 2009/101/EC, together with
(e.g. Transparency Directive) do not apply.
documents referred to in Article 30(1) of this We acknowledge that the link to the
Directive and where relevant, with the
financial statements has been deleted
accounting documents referred to in
(reference to Art. 30 I the old text), but we
accordance with Article
7 9 of Council
should at least clarify in a recital what we
Directive 89/666/EEC.
intend to achieve with the deletion of the
reference to Art. 30:
“The report should be made accessible
within 12 months after the balance sheet
date. Any shorter periods for the publication
of financial statements shall not apply with
regard to the report on income tax
information."
1a.
The report or the statement
published in accordance with paragraph
1 shall be made accessible to the public
within 12 months after the balance sheet
date of the financial year for which the
report is drawn up:
(a)
on the website of the undertaking
when Article 48b(1) applies, or
(b)
on the website of the subsidiary
undertaking or on the website of an
affiliated undertaking when Article
48b(3) applies, or
(c)
on the website of the branch or on
the website of the undertaking which
opened the branch or on the website of an
affiliated undertaking when Article 48b(4)
applies.
1b.
Member States may exempt
undertakings to apply the rules set out in
paragraph 1a of this Article where the
report published in accordance with
paragraph 1 is simultaneously made
accessible to the public on the website of
the register referred to in Article 3(1) of
Directive 2009/101/EC, free of charge to
any third party located within the Union.
The website of the undertakings and
branches as referred to in paragraph 1a
shall contain information on the
exemption and the reference to the
website of the relevant register. The
report on the website of the register must
be accessible to any third parties located
within the Union and free of charge.
2.
The report referred to in Article
DK:
48b(1), (3), (4) and (6) shall remain
We propose the following clarification:
accessible on the website for a minimum of
five consecutive years.
(2) The report referred to in Article 48b(1), (3),
(4) and (6) shall remain accessible on the
20
website
, cf paragraph 1a or on the website
of the register mentioned cf paragraph 1b
for a minimum of five consecutive years.
Article 48e
Responsibility for drawing up, publishing
and making accessible the report on income
tax information
1.
Member States shall ensure that the
DK:
members of the administrative, management
and supervisory bodies of the ultimate
In Article 48e(1), the responsibility of the
parent undertaking
or the non-affiliated
management of subsidiary undertakings
undertakings referred to in Article 48b(1),
exceeding the net turnover threshold of EUR 750
or the subsidiary undertaking exceeding
000 000 is regulated. In our understanding
for each of the last two consecutive
Article 48e(2), should therefor only regulate the
financial years EUR 750 000 000 of total
responsibility of the management of subsidiary
consolidated revenue as referred to in
undertakings
not exceeding the net turnover
threshold of EUR 750 000 000 (and branches).
Article 48b(3), acting within the
We believe this needs to be clarified in Article
competences assigned to them under
48e(2), which refers only to ‘subsidiary
national law, have collective responsibility
undertakings referred to in Article 48b(3).
for ensuring that the report on income tax
Article 48b(3) regulates both subsidiary
information is drawn up, published and
undertakings below and above the net turnover
made accessible in accordance with Articles threshold.
48b, 48c and 48d.
2.
Member States shall ensure that the
members of the administrative, management
and supervisory bodies of the subsidiary
undertakings referred to in Article 48b(3) of
this Directive and the person(s) designated
to carry out the disclosure formalities
provided for in Article 13 of Directive
89/666/EEC for the branch referred to in
Article 48b(4) of this Directive, acting
within the competences assigned to them by
national law, have collective responsibility
for ensuring that, to the best of their
knowledge and ability, the report on income
tax information is drawn up
consistently
with Article 48c,
is published and made
accessible in accordance with Articles 48b,
48c and 48d.
Article 48f
Independent check
Statement by statutory
auditor
Member States shall ensure that, where the
LU:
financial statements of an affiliated
III. Statement of the statutory auditor
undertaking
governed by the law of a
Member State referred to in Article
It appears that the statement of the statutory
48b(1), (3) and (6)(b) are
required to be
auditor does not bring much of an added
audited by one or more statutory auditor(s)
value, is burdensome and could raise costs
or audit firm(s) pursuant to
for the companies. The responsibility for
Article 34(1), the statutory auditor(s) or
preparing the financial statements and
21
audit firm(s) also check
state(s) in the next submitting them for approval, is also a
audit report after publication or, if
members of the administrative, management
applicable after the expiration of the time and supervisory bodies responsibility
limit for publication whether
, as of the
(similarly to the ultimate responsibility for
date of the audit report, the
a report on
drawing, publishing and making accessible
income tax information has been provided
the report on income tax information
and made accessible in accordance with
referred to in Article 48e) which sign off on
referred to in Articles 48b, 48c and 48d
has the latter. The obligation of the auditor for
been published. The statutory auditor(s) or the production of the statement adds
audit firm(s) shall indicate in the audit report therefore checks upon checks of the same
if the report on income tax information has
reporting (financial information that
not been provided or
and made accessible
presumable the same auditor has already
or not, in accordance with those Articles
controlled) in light of the report already
48b and 48d.
checked and approved by the board.
Additionally the role and responsibilities of
the auditor are being enlarged and therefore
most probably raise costs for the companies.
Further, in line with the Article 48f the
obligation to issue and publish such income
tax report is an obligation that would apply
only to entities that are subject to an audit. In
such a case entities that are not subject to be
audited are out of scope, in other words, one
could wonder what is the purpose and added
value of such an additional check/statement
by the independent auditor and does this
objective disappear in case of companies
that are not subject to audit?
Also, it would be good to clarify as to what
is meant by “independent check”. Note that,
in LU there is a distinction between the role
of statutory auditors and the role of
“réviseurs d’entreprises” (independent
auditors).
SE:
We do not see the extra value in that the
statutory auditor or audit firm shall check if
a report has been published and made
accessible. For example there are no such
requirements in Chapter 10 of the Directive.
If it is still to be introduced a requirement
that the statutory auditor or audit firm should
check whether a report has been published
and made accessible, the statement of the
auditor or audit firm should not be part of
the audit report since it does not concern the
accounts or the annual report as such.
Therefore we suggest that the provision, if
introduced, has similar wording as what is
22
already introduced in in Directive
2014/95/EU as regards disclosure of non-
financial and diversity information by
certain large undertakings and groups.
UK:
The UK believes this paragraph should be
deleted as we do not see any reason for an
independent statement by an auditor or any
value added by imposing additional
compliance burdens on businesses.
We believe it would be obvious whether
publication (or not) has taken place and so
we are not clear what additional value there
is in imposing a requirement for an
independent statement by an auditor.
Article 48g
Common Union list of certain tax
jurisdictions
The Commission shall be empowered to
adopt delegated acts in accordance with
Article 49 in relation to drawing up a
common Union list of certain tax
jurisdictions. That list shall be based on the
assessment of the tax jurisdictions, which do
not comply with the following criteria:
(1)
Transparency and exchange of
information, including information exchange
on request and Automatic Exchange of
Information of financial account
information;
(2)
Fair tax competition;
(3)
Standards set up by the G20 and/or
the OECD;
(4)
Other relevant standards, including
international standards set up by the
Financial Action Task Force.
The Commission shall regularly review the
list and, where appropriate, amend it to take
account of new circumstances.
Article 48h
Commencement date for reporting on
income tax information
Member States shall ensure that laws,
regulations and administrative provisions
transposing Articles 48a to 48f apply, at the
latest, from the commencement date of the
first financial year starting on or after
[Publications Office- set the date = one year
after the transposition deadline].
23
link to page 25
Article 48i
Report
The Commission shall report on the
compliance with and the impact of the
reporting obligations set out in Articles 48a
to 48f. The report shall include an evaluation
of whether the report on income tax
information delivers appropriate and
proportionate results, taking into account the
need to ensure a sufficient level of
transparency and the need for a competitive
environment for undertakings.
The report shall be submitted to the
European Parliament and to the Council by
[
Publications Office- set the date =
five
years after the transposition date of this
Directive].’
(3)
Article 49 is amended as follows:
(a)
Paragraphs 2 and 3 are replaced by
the following
‘2.
The power to adopt delegated acts
referred to in Article 1(2), Article 3(13),
and
Article 46(2) and Article 48g shall be
conferred on the Commission for an
indeterminate period of time from the date
referred to in Article 54.
3.
The delegation of power referred to
in Article 1(2), Article 3(13) ,
and Article
46(2) and Article 48g may be revoked at any
time by the European Parliament or by the
Council. A decision to revoke shall put an
end to the delegation of the power specified
in that decision. It shall take effect the day
following the publication of the decision in
the Official Journal of the European Union
or at a later date specified therein. It shall
not affect the validity of any delegated acts
already in force.’
(b)
The following paragraph 3a is
inserted:
‘3a. Before adopting a delegated act, the
Commission shall consult experts designated
by each Member State in accordance with
the principles laid down in the
Interinstitutional Agreement on Better Law-
Making of
13 April 2016 2[date].’
(c)
Paragraph 5 is replaced by the
following:
‘5.
A delegated act adopted pursuant to
Article 1(2), Article 3(13) ,
and Article
2
OJ L 123, 12.5.2016, p. 1.
24
46(2) and Article 48g shall enter into force
only if no objection has been expressed
either by the European Parliament or by the
Council within a period of two months of
notification of that act to the European
Parliament and the Council or if, before the
expiry of that period, the European
Parliament and the Council have both
informed the Commission that they will not
object. That period shall be extended by two
months at the initiative of the European
Parliament or of the Council.’
Article 2
Transposition
1.
Member States shall bring into force
the laws, regulations and administrative
provisions necessary to comply with this
Directive by [Publications Office - set the
date = one
two year
s after entry into force]
at the latest. They shall forthwith
communicate to the Commission the text of
those provisions.
When Member States adopt those
provisions, they shall contain a reference to
this Directive or be accompanied by such a
reference on the occasion of their official
publication. Member States shall determine
how such reference is to be made.
2.
Member States shall communicate to
the Commission the text of the main
provisions of national law which they adopt
in the field covered by this Directive.
Article 3
Entry into force
This Directive shall enter into force on the
twentieth day following that of its
publication in the
Official Journal of the
European Union.
Article 4
Addressees
This Directive is addressed to the Member
States.
25
