Tax transparency is here to stay. As anyone involved in the tax arena will be aware, there has been a paradigm shift in the global tax landscape which has resulted in public and political pressure for action to tackle perceived harmful tax practices, particularly by corporate entities.

Information reported under existing ‘non-public’ CbCR requirements is certainly helping tax authorities gain a better understanding of the overall tax picture of an MNE business and structure. However, one other key motivation of institutions such as the EU in their work around tax transparency, is to ensure public accountability and transparency, and promote a more informed public debate around the level of compliance of certain MNEs. Therefore, in parallel with ‘non-public’ CbCR, the EU is also introducing ‘public’ CbCR rules.

Public vs. non-public CbCR

Public CbCR brings additional considerations and concerns to be weighed against the perceived benefits. For multinationals, the extent to which the scales tip either way in this balance will determine whether the final rules will lead to additional compliance because of different data points, whether it will lead to a loss of competitiveness through disclosure of confidential business information or by going further than other international norms, or whether it will lead to reputational damage through misinterpretation of ‘one-size-fits-all’ disclosure formats. Such issues can only be properly evaluated on the basis of a sound understanding of what the different rules say and how they interact with each other.

EU public CbCR


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EU Public CbyC implementation tracker

Implementation state of play

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The EU public Country-by-Country (CbC) Reporting Directive (the Directive) entered into force on December 21, 2021 and introduced a timeline for the adoption of rules that require multinational groups operating in the EU and that exceed certain size thresholds to publish certain information on their tax affairs.

EU Member States had until June 22, 2023 to transpose the Directive into domestic legislation. The rules will apply, at the latest, from the commencement date of the first financial year starting on or after June 22, 2024. Individual Member States can nevertheless opt for an early adoption of the rules.

The rules

The rules require multinational groups with a total consolidated revenue of EUR 750 million to report either if they are EU parented or otherwise have EU subsidiaries or branches of a certain size. 

The report requires information on all members of the group (i.e. including non-EU members) within seven key areas: brief description of activities, number of employees, net turnover (including related party turnover), profit or loss before tax, tax accrued and paid, and finally the amount of accumulated earnings. To the extent there are material discrepancies between reported amounts of income tax accrued and income tax paid, the report may include an overall narrative providing the explanation for these discrepancies. 

The information must be broken down for each EU Member State where the group is active and also for each jurisdiction deemed non-cooperative by the EU or that has been on the EU’s “grey” list for a minimum of two years. Information concerning all other jurisdictions may be reported on an aggregated level.

Reports are to be published in an EU Member State business register, but also on companies’ websites, where they should remain accessible for at least five years. Where the ultimate parent is not governed by the law of an EU Member State, the reporting generally has to be done by the EU subsidiaries or branches, unless the ultimate parent publishes a report including those subsidiaries and branches.

There is a carve out in this respect for ‘small’ subsidiaries and branches as well as a general carve out, subject to conditions, for financial sector groups that report under the CRD IV rules. Responsibility for the reports lies with the management of the ultimate parent (if in the EU) or, in other cases, with the management of the EU subsidiaries or branches concerned. 

Official documentation and resources

Public CbCR

  • Directive (EU) 2021/2101 of the European Parliament and of the Council of 24 November 2021 amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches - final text.

Non-public CbCR

  • EU Council Directive 2016/881 (PDF 386 KB) (amending Directive 2011/16/EU) as regards mandatory exchange of information in the field of taxation
  • The OECD maintains an up to date list (PDF 206 KB) of signatories of the Multilateral Competent Authority Agreement on the Exchange of CbCR (CbC MCAA)

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