The Finance Act for 2016 and the Amended Finance Act for 2015 were published in the official journal on 30 December 2015.
The Finance Act for 2016 introduces a country-by-country reporting obligation in Article 223 C of the French general tax code, which is in line with Action 13 of the OECD’s base erosion and profit shifting (BEPS) project.
According to the report two types of companies are obliged to the new reporting requirements which are as follows:
-Companies that establish and maintain consolidated accounts; part of a group with a consolidated turnover in excess of €750 million; and have foreign branches or hold or control, directly or indirectly, foreign entities[Except those companies that are part of entities subject to the requirement to file a country-by-country].
-Companies that are held by entities established in countries that do not take part in the automatic exchange of country-by-country reports and would be required to file the country-by-country report if it were established in France.
The report will have to be filed in the electronic form for each fiscal year.
Failure to produce such report would subject to a penalty in an amount up to €100,000. Exclusions or inaccuracies in the report would be subject to a penalty in an amount of €15 per omission or inaccuracy, with the total amount of such penalties not being less than €60 or more than €10,000.
The new country-by-country reporting requirements are applicable to fiscal years opened on or after 1 January 2016.
The Finance Act for 2016 states the content and terms of an annual transfer pricing declaration, pursuant to Article 223 B of the French tax code.
In the case of consolidated tax group, the parent company is now required to file this declaration—both for itself and for each of its subsidiaries that are members of the tax group.
Also, the declaration will have to be filed electronically. These new measures are applicable to transfer pricing declarations that are required to be filed on or after 1 January 2016.