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Vanilla and Other Kinds of BEPS CbC Flavours

What kind of other BEPS flavours can we expect as countries implement their interpretation of the Country by Country (CbC) rules, after the OECD and G20 published the consent amongst its members on the vanilla version of CbC in BEPS Action 13, on 5 October 2015?

In this article I will briefly describe the actual compatibility of the Action Plan 13 with some government’s and the EU’s point of view of the CbC implementation. Furthermore I petition for making the CbC requirement more equitable by introducing some kind of hardship rules in situations where taxpayers may not be able to comply, due to lack of international cooperation amongst countries.


The CbC implementation and compliance is not likely to raise EU law issues, unless they constitute a discrimination burden with regard to non-nationals. The major CbC implementation issue deals with the confidentiality and appropriate use condition that OECD and G20 members consented on in adopting the CbC plan; i.e. the OECD point of view is that CbC information would only be shared amongst tax authorities and not be made public and the CbC information should only be used for high level transfer pricing risk.

On 27th October 2015, the European Parliament’s Special Committee Tax Rulings report (TAXE) was adopted by European Parliament, recommending to the European Commission a.o. to introduce CbC building on the OECD standards and to promptly transpose all OECD guidelines into national law, complemented by a legislative framework to cater for EU single market requirements.

On 16th December 2015, the European Parliament adopted the ECON report by majority. The ECON report contains recommendations to the European Commission on bringing a.o. transparency in the EU. One of the proposals is that “all necessary steps shall be taken to introduce comprehensive and public country-by-country reporting for all multinational companies, in all sectors, by the first quarter of 2016”. The European Commission is required by law to respond to the TAXE and the ECON report, either with a legislative proposal or with an explanation for not following the recommendation, within 3 months.

Individual EU Member States and non EU countries (4) are implementing their own version of CbC. Most recently, the diverging opinions about confidentiality in CbC became obvious in France. On 4th December 2015 France’s lower House of Parliament approved with a narrow majority an amendment that would require public reporting of CbC information. At the very last moment on the night of 16th December 2015 it was not adopted after a 2nd round of re-voting in the National Assembly upon request of the French Government. (1) The government argued that it was in favour of increasing transparency of the CbC reports, but it refuses to implement in isolation, fearing to damage the country’s competitiveness by progressing.

In the UK, Poland and Spain CbC reporting obligations were adopted in the first half of 2015, effective 1st January 2016 without public disclosure of the CbC information.

It remains to be seen how governments of EU/EEA Member states will respond to the EU Proposal of a public CbC. I expect that the EU public disclosure flavour of a CbC implementation will not be adopted as long as the unanimity voting applies to fiscal affairs, perhaps over time if there were a qualified majority voting.


In the US, the political discussion on CbC and other BEPS measures are diverging between Treasury and The House and Senate, governed by concerns of confidentiality and competition. Nevertheless, on 21st December 2015 the US Treasury released proposed regulations to implement the CbC requirement. In the proposed regulations they reserve the right to pause automatic exchange of CbC reports when the other tax jurisdiction is in compliance with confidentiality requirements, data safeguards and the appropriate use standards under the information exchange agreement or competent authority arrangement. The US Treasury is inviting the public to submit written comments within 90 days after publication in the federal register (REG-109822-15).

In a letter to the Treasury, Sen. Orrin G. Hatch (R-UT), Chairman of the Senate Finance Committee, and Rep. Paul D. Ryan (R-WI), Chairman of the House Ways and Means Committee and Speaker of the House, said, “we are concerned about the CbC reporting standards that will contain sensitive information related to a U.S. multinational’s group operations.” (2)

In the opening speech of the Finance Hearing on OECD BEPS reports on 1 December 2015, Senator Hatch stated “…throughout this process we have heard concerns from large sectors of the business community that the BEPS project could be used to further undermine our nation’s competiveness and to unfairly subject US companies to greater tax liabilities abroad” (3).


In 2015 in Australia and Mexico the OECD’s CbC elected reporting requirements to incorporate into law effective 1st January 2016, subject to a strict penalty regime for non-compliance. Australia added some hardship clauses by allowing the Commissioner to exempt particular entities from the rules.


In the OECD report “Action 13: Guidance on the Implementation of Transfer Pricing Documentation and Country by Country reporting”, it is considered that no exemptions from filing the CbC report should be granted. This could be held sustainable when all OECD and G20 countries would abide by the 3 conditions of “confidentiality”, “consistency” and “appropriateness”. As discussed above the confidentiality concept may not be adhered to by a number of major jurisdictions.


There seems to be support in OECD and G20 countries around the world, which will eventually lead to requirement by multinationals to file CbC reports with the taxing authorities of States. However most Governments of countries oppose public CbC reporting and are not willing to implement public CbC and may not want to cooperate with jurisdictions that would provide CbC information to the public. To foresee in this situation and in situations where company information may not be shared due to supranational legislation, I would encourage the OECD to issue guidelines of hardship clauses for non-compliance. Then OECD member States can consider when implementing CbC requirements, rather than many different and possibly conflicting unilateral measures from individual governments.

  1. “No progress on transparency without European agreement, says France”,, 19 December 2015,
  2. The US Senate Committee on Finance, “Hatch, Ryan Call on Treasury to Engage Congress on OECD International Tax Project,” news release, June 9, 2015, 8d5a-5f998771188b
  3. “Hatch Statement at Finance Hearing on OECD BEPS Reports”, news release, 1 December, 2015 ,


Harm Oortwijn

Harm is Director International Tax with Paramount Pictures (A Viacom company). He has some 20 years of international tax experience with a number of multinational companies as both in-house professional and tax consultant. He is well-versed in international tax software and solutions development, US and international tax planning and compliance, US Gaap and IFRS tax accounting principles and ERP tax implementation issues. He studied Chartered Public Accountancy at “Hogeschool Windesheim” in Zwolle (NL) and he graduated with honours from (UBI) United Business Institutes in Brussels with a Master’s degree in Global Tax Management.

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