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ICC Lauds French Ruling Outlawing Public CbC Reporting

by Mike Godfrey,, Washington

21 December 2016

The International Chamber of Commerce (ICC) has welcomed the French Constitutional Court's ruling that struck down as unconstitutional a French law requiring public disclosure of country-by-country (CbC) reports.

The ruling was delivered on December 15, 2016. According to the Court, public disclosure of CbC reports would be a "disproportionate violation" of freedom of enterprise.

The ICC said: "Following on the heels of the EC proposals, the French Parliament recently adopted a law on transparency. In its Article 137, the law includes provisions for public disclosure of tax data on a CbC basis, which would enable the identification of essential elements of an organization's industrial and commercial strategy. The law was submitted to the French Constitutional Court for consideration. The French Constitutional Court determined that the provisions of Article 137 represent a disproportionate violation of the freedom of enterprise and are therefore contrary to the French Constitution."

The ICC said that "the disclosure of company data to competent tax authorities, as set out by the G20/OECD countries, is recognized as an important instrument to help tax authorities improve their ability to fulfill their task in assessing the tax liabilities of their taxpayers – with the explicit provision that this information remains confidential."

The ICC added that "public disclosure of CbC tax reports of multinational enterprises would be counterproductive to efficient tax administration. The world business organization has also warned that it would potentially be harmful to the relationship between taxpayers and tax authorities."

Christian Kaeser, Chairman of the ICC Commission on Taxation, said: "The relationship between taxpayers and tax authorities should be characterized by openness and trust. Disclosure of tax data would negatively impact this important dynamic.

"The recent positions taken by the French Constitutional Court and the European Council Legal Service reaffirm this view and will hopefully reinforce the need to align with international guidelines, which is imperative for establishing a consistent global landscape."

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