France: public county-by-country reporting declared unconstitutional

by Davide Anghileri

The French Constitutional Council, on 8 December, ruled that sections of a law establishing public country-by-country reporting by multinationals are contrary to the Constitution.

The ruling, Decision n. 2016-741, involved a French Law, Loi relative à la transparence, à la lutte contre la corruption et à la modernisation de la vie économique. The law provides that companies with a turnover exceeding €750 million must file an annual country-by-country report freely accessible to the public, with effect from 1 January 2018.

The question was raised by a group of senators and deputies, who argued that the law is not compliant with the Constitution because it requires companies to disclose information that is an essential and fundamental element of their commercial strategy.

The government countered that public country-by-country reporting cannot be considered unconstitutional as it is not disproportionate or against the freedom of enterprise. In fact, the exchange of information is justified by the fight against tax fraud and fiscal evasion, a principal recognised and defended by the Constitution, the government said.

The government also argued that the information to be published already appears in an aggregated form in the company’s financial statements. Finally, the government noted that similar provisions already exist in other sectors, such as for extractive industries and for banking sector.

In its decision, the Council recognized that, in line with the constitutional objectives, the aim of public country-by-country reporting is to fight against tax fraud and fiscal evasion.

However, the Council stated that public country-by-country reporting infringes on entrepreneurial freedom (liberté d’entreprendre) and is manifestly disproportionate to the objective pursued.

In fact, in the opinion of the Council, the obligation on companies to make public economic and fiscal indicators corresponding to their activity on a country-by-country basis would allow all operators involved in the markets in which they operate, in particular their competitors, to identify essential elements of their industrial and commercial strategy.

Consequently, the Council concluded that public country-by-country is contrary to the Constitution and repealed that provision from the law.

Davide Anghileri

Davide Anghileri

Researcher and lecturer at University of Lausanne

Davide Anghileri is a PhD candidate at the University of Lausanne, where he is writing his thesis on the attribution of profits to PEs. He researches transfer pricing issues and lectures for the Master of Advanced Studies in International Taxation and Executive Program on Transfer Pricing.

Anghileri, a Contributing Editor at MNE Tax, previously worked as a policy advisor to the Swiss government on BEPS issues.

Davide can be reached at

Davide Anghileri
Davide can be reached at

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    • Dear Robert, bear in mind that the ruling regards the public country-by-country reporting. Action 13 of the BEPS reports does not address public country by country reporting and it is specified that information disclosed in transfer pricing documentation have to remain confidential.
      In fact in paragraph 44 of Action 13 it is stated that “Tax administrations should take all reasonable steps to ensure that there is no public disclosure of confidential information (trade secrets, scientific secrets, etc.) and other commercially sensitive information contained in the documentation package (master file, local file and Country-by-Country Report).”

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