Insight
Large Danish MNE’s must publish CbC Report with tax info
Tax transparency is becoming a focus going forward
The transparency around tax information is increasing and multinationals therefore need to consider this in their tax strategy and tax operations to ensure a responsible tax position but also to avoid confusion on the tax information made publicly available.
16 June 2023
Going forward, large Danish multinationals must publish a Country-by-Country Report with information on corporate tax information.
For income years starting on or after 22 June 2024, all large multinationals with consolidated revenue above DKK 5.6bn must publish a so-called Country-by-Country Report for the public containing financial information on the activities performed in each of the countries of operation, including tax information.
Consequently, going forward, the transparency around tax information is increasing and multinationals therefore need to consider this in their tax strategy and tax operations to ensure a responsible tax position but also to avoid confusion on the tax information made publicly available.
We foresee that in future, multinationals need to focus more on the overall picture of their tax position preparing tax risk assessments to prioritise the effort on taxes ensuring compliance with tax regulation and related reporting based on the tax strategy set by the Management according to the tax policy of the Group.
The reporting shall be made no later than 12 months after the end of the financial year to which the reporting relates. We expect that the Danish authorities will establish a special solution for reporting, and the information in the reports will be presented using a common template similar to what has been seen from the BEPS Country-by-Country Reporting. Opposite to the BEPS Country-by-Country Reporting that is reported to the Danish Tax Authorities the public Country-by-Country Reporting must be reported to the Danish Business Authorities.
The multinationals must make available the Country-by-Country Reporting for a minimum of five years at webpage or similar.
The Country-by-Country Reporting must include the following information about the company's or group's tax affairs:
- A brief description of the activities
- Number of employees
- Revenue, including related party
transactions, including: - Profit before tax
- Calculated payable income tax in each tax jurisdiction
- Income tax paid in each tax jurisdiction
- Accumulated profit.
Each information must be provided separately for activities in each country within the EU and for activities in countries included on the EU lists of non-cooperative jurisdictions for tax purposes. Information on other activities outside the EU may be provided in aggregate.
The Bill was passed by the Danish Parliament on 1 June 2023 and will enter into force on 22 June 2023 with effect for financial years beginning on or after 22 June 2024. For companies that submit their annual report after the beginning of the calendar year, the new requirements thus apply to the financial year 2025, and these companies must therefore submit their first Country-by-Country Reporting to the Danish authorities no later than 31 December 2026.
