UPDATED MAY 13, 2016

On May 12, 2016 the European Parliament issued a press release announcing that on that same date the Members of the European Parliament (MEPs) welcomed the European Commission's proposal for automatic exchange of corporate tax information among national tax authorities. According to the press release the MEPs see it as "a positive step in the fight against aggressive corporate tax planning". In the press release it is stated that the MEPs also advocated adding further safeguards in the text to ensure that competition in the single market is not distorted by advantageous national tax deals with multinationals.

The report by Dariusz Rosati (EPP, PL), which according to the press release was approved by 567 votes to 30 with 53 abstentions, sets out Parliament's recommendations to EU member states, which acording to the press release would have to decide unanimously on the Commission's proposal.

The proposal would oblige multinational firms with total consolidated revenues of €750 million or more to file a country-by-country report in the EU member state in which the ultimate parent entity of the group is resident for tax purposes. That member state should then share this information with other member states where the company operates. Information to be reported includes revenues, profits, taxes paid, capital, earnings, tangible assets and the number of employees.

The press release continues by stating that MEPs insist that the Commission should have full access to the information exchanged among member states' tax authorities, to enable it to assess whether member states’ tax practices comply with EU rules on state aid.

The directive will set deadlines of 12 months after the close of the fiscal year for filing, and a further three months for automatic exchange. According to the press release, in order to ensure that the reporting obligation is enforced, MEPs want member states to introduce sanctions to be imposed on multinational companies that fail to file their country-by-country report.

Next steps

EU member states agreed their stance on the proposal on March 8, 2016, pending the European Parliament opinion and the lifting of reservations of national parliaments. According to the press release the Council would have to approve the decision formally at one of its upcoming meetings.

Update:

The text adopted by the European Parliament can be found here.

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