Multinational entities (MNEs) in the EU may soon have to file and make public their country-by-country (CbC) report under new EU rules. The public EU CbC reporting directive entered into force on December 21, 2021, which means EU member states have until June 22, 2023 to implement the directive into their domestic legislation. As a result, the rules will generally apply for financial years starting on or after June 22, 2024. However, EU member states could also choose to apply the rules earlier.

The directive was previously published in the Official Journal of the EU on December 1, 2021, shortly after the European Parliament formally adopted the directive.

Reporting requirements

Under the directive, MNEs with an entity or branch in the EU and total consolidated revenue of at least EUR 750 million in each of the last two consecutive financial years will be required to:

  • File a CbC report on tax and related information concerning the whole group in the relevant EU member states
  • Publish a CbC report on their corporate websites.

The report must also include data concerning non-EU-related operations.

The directive is relevant to non-EU headquartered companies that exceed the revenue threshold and have medium-sized or large subsidiaries in the EU or branches that meet certain net turnover criteria.

Which entities must report?

According to the EU directive, where an ultimate parent company is based in the EU, the EU parent is required to file and publish the report.

Where non-EU parented groups operate in the EU through qualifying subsidiaries or branches, each EU subsidiary or branch would generally be required to publish their CbC report (with income tax information of their ultimate parent) on their websites, unless the non-EU parent publishes the report on their website. The non-EU parent would also have to assign an EU subsidiary or branch to file the report with their national trade registry.

Certain banks established in the EU would generally be exempt from these new EU public CbC rules if they are covered by a separate bank-specific reporting directive. Non-EU parented banks operating in the EU would have to publish a CbC report if they are within the scope of the new public CbC directive.

What to report?

Under these rules, qualifying MNEs must provide information related to their whole group within the following key areas:

  • A brief description of activities
  • Number of full-time employees
  • Net turnover (including related-party turnover)
  • Profit or loss before income tax
  • Income tax accrued
  • Income tax paid
  • The amount of accumulated earnings.

Qualifying MNEs must provide this information separately for each EU member state, as well as each country on the EU list of non-cooperative jurisdictions, or on the "grey list" for two consecutive years. These MNEs must also provide aggregated information concerning all other jurisdictions.

MNEs would be required to produce and publish these reports annually within 12 months after the balance sheet date for the relevant financial year of the group.

Other considerations

As MNEs prepare for these new rules, they should consider:

  • Whether their group and EU subsidiaries or branches are in scope
  • How to compare the information requirements based on the public EU CbC and non-public EU CbC (OECD CbC) and any other CbC reporting standards specific to various countries
  • How to determine if current tax reporting systems can be aligned to produce information that complies with all CbC reporting requirements and identify when gaps need to be filled.


For more information, contact your KPMG adviser.

Information is current to December 20, 2021. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500