EU public CbCR Directive implemented

Non-EU groups will be the first to be impacted, with reporting potentially required for FY23.

The EU public CbCR Directive requires MNEs to publish CbCR data. The EU Member States had until 22 June 2023 to transpose the Directive into domestic legislation. With some countries adopting the legislation as of 1 January 2023, reporting for FY23 might be required – particularly for non-EU groups.


Multinational entities (MNEs) – whether headquartered in the EU or outside – with revenue exceeding the EUR 750 million threshold and a qualifying EU presence need to publish a Country-by-Country Reporting (CbCR), including data such as the profit or loss before tax and the accrued and paid income taxes. For further information in this regard see our factsheet.

Anne Marie Anselmi

Partner, International Corporate Tax, Head of Tax Accounting

KPMG Switzerland

 Tamara Bosch, KPMG Switzerland
Tamara Bosch

Expert, Corporate Tax

KPMG Switzerland

Implementation overview

All EU countries were required to transfer the Directive into domestic legislation as of 22 June 2023.

The suggested timeline of the EU Directive was to publicly disclose the information for financial years starting on or after 22 June 2024 for most groups, resulting in a first reporting obligation for the financial year to 31 December 2025 no later than 12 months after the period end, i.e. by 31 December 2026. Most jurisdictions, including Denmark, France and Germany, have implemented the Directive accordingly. 

However, Romania specifically has adopted the Directive early, making it applicable for accounting periods starting from 1 January 2023 and Spain has a shorter reporting deadline (6 months after the financial year). 

The requirement of most EU members are in line with the Directive and are limited to the quantitative public disclosures of the CbCR. Only a few opted for a further mandatory qualitative narrative; for example, Hungary requires an explanation for the reasons behind any significant differences between the income tax accrued and income tax paid.

About the EU Public CbCR directive

The EU Public CbCR directive

Game changer in the tax transparency debate

Earlier adoption for non-EU-parented groups such as Swiss MNE groups

EU-headquartered MNEs in a country with later adoption and present in a country with earlier adoption can generally follow the timeline of the headquarter country. In other words, they can wait for public disclosure until the later date, i.e. a German group with presence in Romania will not have to publish the report until 2026.

However, non-EU parented groups need to comply with the local legislation, if they have a qualifying presence in that local jurisdiction. This means that either the subsidiary/branch or the headquarter has to publish the CbCR on time according to the earliest timeline applicable to the group. So, a Swiss MNE group with a qualifying presence in Romania will have to publish the report already in 2024 or at a minimum carefully evaluate the potential risks (e.g. penalties or more importantly reputation risks) if it is not yet in a position to adhere to such legislation.

Next steps

There is now clearly a need for all Swiss (or other non-EU) MNEs to carefully check whether they have a qualifying presence in an early-adopting country like Romania in order to be ready to publicly disclose their CbCR for FY 2023 in the calendar year 2024. A non-EU headquartered group are deemed to have a qualifying presence in an EU member state when their subsidiary or branch meet two of the following three requirements for the prior year and current year (i.e. FY 2022 and FY 2023):

  • Balance sheet total > EUR 4 m
  • Net revenue > EUR 8 m
  • Employees > 50

Further, it’s time to:

  • Perform a risk assessment based on the current CbC profile, considering what steps may need to be taken and what context would need to be given to such data to manage potential reputational risks. Considerations around BEPS Pillar II (CbC safe harbours) also need to be reflected here. 
  • Evaluate whether the required data, i.e. the data the company wants or has to disclose, can be extracted from the current systems.
  • Consider whether an independent audit/assurance could/should be obtained for some or all of the data to be reported – at the very least a confirmation by the auditor is required that the report has been published!
  • Discuss with all internal stakeholders how the publication of the CbC report impacts the overall tax transparency roadmap and sustainability strategy.

It can be helpful to get an outside view on the current CbCR profile and associated reputational risks. Based on this, specific action items can be developed to mitigate risks. Another key challenge is the extraction of the required data from the current/future systems, particularly if additional information should be included for a more comprehensive picture compared to today’s CbCR. An external expert can help to ensure the fundamentals are in place for reliable data, and also guide through the process of publishing a comprehensive tax transparency report.