On 8 March 2016, the Council of the European Union (ECOFIN) reached a political agreement on the European Commission's proposal to implement country-by-country reporting (CbCR) to local tax administration, as well as the exchange of the reports between them.
The agreement is, however, still subject to the scrutiny of the UK parliament. This is a first step towards adoption of the European Commission's proposal, which was included in its Anti-Tax Avoidance Package published on 28 January 2016.
The agreement entails the mandatory exchange of tax-related financial information rules which will apply to multinational companies operating cross-border in the European Union. After the implementation, all Member States will have all the necessary financial information in order to protect their tax bases by addressing the companies that try to avoid paying their so-called 'fair share' of taxes in the country where their profits originate from.
The CbCR rules are seen as a necessary complement to the OECD guidelines on BEPS.