CBCR Agreement List Who’s On and Who’s Not
The long awaited list of states or territories that have adopted the CBCR (1) tax and which have concluded an agreement with France for automatic exchange, was finally published in the ‘Journal Officiel’ on 8 July 2017 (2).
Background:
Since the French Financial Law of 2016 (specifically Article 121), companies in France with a consolidated worldwide turnover of € 750 million or more must file a country-by-country declaration (3). This declaration effectively facilitates the control of transfer pricing.
Which countries are concerned?
The list includes countries in the following jurisdictions (for fiscal years beginning on or after 1 January 2016):
- Africa : Republic of South Africa;
- Americas : Bermuda, Brazil, Canada, Chili, Mexico;
- Asia : China, South Korea, Indonesia, and India and Japan (4);
- Europe : Member states of European Union, Guernsey, Jersey, Norway;
- Oceania: Australia, New Zealand.
Are there any exceptions?
A French subsidiary or French branch of an international group that has an obligation to draw up consolidated accounts and whose consolidated turnover is greater than or equal to € 750 million will be exempt from filing the CBCR tax with the French tax authorities if:
- The parent entity owning or controlling it directly or indirectly, has its tax residency in a country listedabove;
- The entity demonstrates that another entity of the group, whether French or tax resident in a listed country, has been designated to deposit the CBCR tax in its state of residence.
And the United States?
The United States is not currently included on the list just issued. Thus, for the moment, a French subsidiary of an American group will not be exempt from the filing CBCR in France unless it demonstrates that another entity in the group is filing the CBCR in a country also on the list.
However, this list is expected to change in the coming months and the United States generally favours the establishment of bilateral agreements.
Therefore, understanding that this list may change and be enlarged with the addition of new agreements, it must be closely watched, most especially during the last quarters of 2017 in order to be able to take action before the deadline for the 2016 calendar year (31 December 2017).
Primexis, an independent consultancy and accounting firm specializing in the support of French and international companies and subsidiaries for more than 30 years, assists you in the collection and presentation of these declarations in the annual report and tax package.
- Arrêté du 6 juillet 2017 pris en application du II de l’article 223 quinquies C du C.G.I
- Article 121 de la LOI n° 2015-1785 du 29 décembre 2015 de finances pour 2016(1) Country By Country Reporting, European Commission – Fact Sheet, see here.
(2) Arrêté du 6 juillet 2017 pris en application du II de l’article 223 quinquies C du Code Général des Impôts
(3) Article « Publication of Country by Country Reporting (CbCR) », Primexis.eu
(4) For fiscal years opened from 1 April 2016
