EU: Update on status of “public” country-by-country reporting
The proposal for public CbC reporting is advancing to the next stage.
The proposal for public CbC reporting is advancing to the next stage.
Two committees of the European Parliament on 14 June 2021 approved compromise text regarding a proposed EU “public” country-by-country (CbC) reporting requirement.
The proposal for public CbC reporting thus advances to the next stage.
Background
The European Commission in April 2016 presented a proposal for public CbC reporting requirements for EU-headquartered multinational groups having a total consolidated group revenue of at least €750 million.
The proposal for public CbC reporting was deadlocked, until in February 2021 when the EU Council agreed to support the proposal. Thereafter, the EU Council and the European Parliament in March 2021 approved mandates for their respective negotiating positions in anticipation of the start of interinstitutional negotiations (so-called “trilogue”) on the directive.
The EU Council and the European Parliament announced 1 June 2021 a provisional political agreement on the public CbC reporting directive. Read TaxNewsflash.
The compromise text was subsequently approved on 9 June 2021 by EU Member State representatives in the Permanent Representatives Committee.
European Parliament action
The compromise text [PDF 235 KB] of the public CbC reporting directive was approved by two European Parliament committees on 14 June 2021. The agreement would require multinational entities, whether headquartered in the EU or outside, having a total consolidated revenue of more than €750 million (in each of the last two consecutive financial years) and that are active in more than one country, to publish income tax information in each EU Member State, as well as in each third country listed for two consecutive years.
Next steps
The next step is for the EU Council to act, then the European Parliament would need to approve the Council’s position (expected after the summer recess). If approved, the directive would be published in the Official Journal of the EU and would enter into force on the 20th day following the date of its publication.
EU Member States then would have 18 months to transpose the directive into national law.
KPMG observation
The compromise text includes an amended “safeguard clause,” by which companies could defer the disclosure of commercially sensitive information for a maximum of five years—a reduction from the six-year period initially proposed by the EU Council. However, this does not include the European Parliament’s request that local authorities would pre-approve the deferral and that EU Member States would transmit the omitted information, confidentially, to the European Commission.
Read a June 2021 report prepared by KPMG’s EU Tax Centre
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