Article 223 quinquies C of the General Tax Code (CGI) introduced a country-by-country reporting of economic, accounting, and tax results that must be filed electronically by certain companies to combat tax avoidance and evasion.

The introduction of this new reporting requirement (form 2258-SD) is part of the international project to combat the erosion of corporate tax bases and profit shifting. It represents the implementation in domestic law of the OECD’s recommendation on country-by-country reporting (CBCR), as outlined in the OECD’s Base Erosion and Profit Shifting (BEPS) plan and incorporated into the EU’s DAC4 directive (Directive 2011/16/EU as amended by Directive 2016/881/EU of May 25, 2016).

The country-by-country report must comply with the standards established by the OECD and the European Union. The information contained in the country-by-country report submitted by each group is shared with partner states that have at least one entity within their territory.

Starting from fiscal years beginning on or after January 1, 2016, the obligation to file a country-by-country report applies to:

• Groups established in France that, in the fiscal year preceding the report filing year, have an annual consolidated turnover exceeding 750 million euros (or its equivalent in another currency), and prepare consolidated financial statements, hold and control companies or branches outside of France for which separate financial statements are prepared for regulatory, financial reporting, internal management, or tax purposes, and are not owned by French or foreign companies already subject to this reporting requirement. Groups established in France that do not prepare consolidated financial statements solely due to the nature of their activity are also subject to this reporting obligation as long as they meet the other aforementioned criteria.
• Companies established in France and belonging to a foreign group that meets the above criteria when they have been designated by the group for this purpose or cannot demonstrate that another French or foreign entity has been designated for this purpose. This particularly targets French subsidiaries of groups established in a state or territory that has not implemented country-by-country reporting. In this case, there are two options:
  • The French subsidiary of the foreign group submits the country-by-country report to the French tax administration with all relevant group information;
  • Another subsidiary of the group, established in a state or territory implementing country-by-country reporting, is designated to submit the report on behalf of the group.

All groups meeting the above criteria are subject to this reporting obligation regardless of the group’s activity.

Furthermore, only one country-by-country report must be filed by the group, including data for all group entities. This report must be submitted either by:

• The ultimate parent entity of the multinational enterprise group;
• An entity designated to file the report on behalf of the ultimate parent entity (a surrogate entity).

If the group does not meet the aforementioned criteria, no report needs to be filed.

The company subject to or designated for filing must complete its tax return form no. 2065-SD (as required by Article 46 quater-0 YE of Annex III to the CGI):

• Check the corresponding box if the group company is subject to filing under I-1 of Article 223 quinquies C of the CGI;
• Check the corresponding box if the company located in France has been designated to fulfill the reporting obligation on behalf of the ultimate parent company;
• Complete the section regarding the identity and location of the company if the ultimate parent company has designated another company to file the report instead of the company located in France that meets the criteria of I-2 of Article 223 quinquies C of the CGI.

Starting from the 2019 filing campaign (April 2019), a new section has been added to tax return form no. 2065-SD: complete the section regarding the identity and location of the ultimate parent company of the group if it has been designated to fulfill the reporting obligation.

If this information is omitted, a corrective form no. 2065-SD must be submitted.