Council of the European Union 25 May 2016, Council Directive (EU) 2016/881 of 25 May 2016 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation

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Council Directive (EU) 2016/881 of 25 May 2016 amends Directive 2011/16/EU to introduce mandatory automatic exchange of country-by-country reports among EU Member States, requiring the Ultimate Parent Entity (or designated Surrogate Parent Entity or Constituent Entity) of a multinational enterprise group (MNE Group) with annual consolidated group revenue exceeding EUR 750,000,000 to file annual country-by-country reports disclosing revenue, pre-tax profit or loss, income taxes paid and accrued, stated capital, accumulated earnings, employee numbers, and tangible assets on a jurisdiction-by-jurisdiction basis. The exchanged information is restricted to assessing high-level transfer-pricing and base erosion and profit shifting risks and may not directly serve as the basis for transfer-pricing adjustments, though it may ground further enquiries leading to appropriate adjustments to taxable income. Member States were required to transpose the Directive by 4 June 2017, with application from 5 June 2017, and must establish effective, proportionate, and dissuasive penalties for infringements of national implementing provisions.AI