Public Country-by-Country Reporting (Public CbCR)

Public Country-by-Country Reporting (Public CbCR) is an EU transparency obligation requiring large multinational enterprises to publicly disclose certain financial and tax information broken down by country. It is the public version of the OECD CbCR previously accessible only to tax authorities (BEPS Action 13). Directive (EU) 2021/2101 amends the EU Accounting Directive 2013/34/EU by inserting Articles 48a to 48g.

• Threshold: Consolidated annual turnover exceeding EUR 750 million in two consecutive years
• Disclosures required: Revenue, profit/loss before income tax, income tax paid, income tax accrued, number of employees on a full-time equivalent basis, accumulated earnings, nature of activities
• EU + non-cooperative tax jurisdictions: Full breakdown for EU member states and tax jurisdictions listed in Annex I and Annex II of the Council conclusions on non-cooperative jurisdictions for tax purposes; aggregated for remaining countries
• Publication obligation: In company register and on company website

Public CbCR was politically contentious for years: while the European Parliament supported the measure, some member states in the Council blocked adoption. The breakthrough came in June 2021 when a qualified majority was achieved in the Council. Directive (EU) 2021/2101 was published in the Official Journal on 1 December 2021.

Member states were required to transpose the directive by 22 June 2023. The first reporting period commenced for financial years beginning from 22 June 2024. The directive amends the EU Accounting Directive 2013/34/EU by inserting Articles 48a to 48g, thereby creating a public reporting obligation that exists alongside the confidential OECD CbCR (transposed in the EU via DAC4, Directive 2016/881/EU).

Reporting obligations apply to:

• EU-parented groups with consolidated turnover exceeding EUR 750 million
• EU subsidiaries or EU branches of non-EU parent companies exceeding the threshold

Exempt are parent undertakings and standalone undertakings subject to Directive 2013/36/EU (CRD IV) whose report under Art. 89 CRD IV covers all activities, including those not falling under Part Three, Title I, Chapter 2 of Regulation (EU) No 575/2013.

• Annual report with country-level data on: revenue, profit/loss before income tax, income tax paid (cash basis), income tax accrued, number of employees on a full-time equivalent basis, accumulated earnings, nature of activities, name/financial year/currency/subsidiaries
• Separate disclosure for each EU member state and each tax jurisdiction listed in Annex I (blacklist) and Annex II (grey list) of the Council conclusions on non-cooperative jurisdictions for tax purposes
• Aggregated data for all other countries
• Publication on company website (free, machine-readable) and filing with company register; the Commission shall lay down a common template and electronic reporting formats via implementing acts (Art. 48c(4))
• Publication within 12 months of the balance sheet date of the financial year concerned (Art. 48d(1))
• Retention for at least 5 years
• Member states may permit temporary deferral of specific disclosure items for up to 5 years (safeguard clause, Art. 48c(6)) where disclosure would be seriously prejudicial to commercial position; no deferral is permitted for non-cooperative tax jurisdictions (Annex I and II)
• Management responsibility; the statutory auditor must state in the audit report whether the undertaking was required to publish the CbCR report and whether it was published (Art. 48f)

5 corrections:
- Missing disclosure item: nature of activities
- AIFMD/UCITS exemption not in the directive
- Equity capital is not a disclosure item in the directive
- Directive amends 2013/34/EU, not DAC4 (2016/881/EU)
- summary_de: 'cumulative tax by country' is not a correct disclosure item
7 clarifications.
4 notes.