EU co-legislators reach agreement on public country-by-country reporting  

Deloitte Malta Tax Alert

10 June 2021

On 1 June 2021, representatives of the Portuguese presidency of the Council of the EU reached a provisional political agreement with the negotiating team of the European Parliament on a proposed EU Directive on the disclosure of income tax information by certain undertakings and branches (the ‘Public CbCR Directive’). The Public CbCR Directive would strengthen administrate cooperation among Member States in the area of country-by-country reporting following the adoption of Directive 2016/881/EU on automatic exchange of country by country reports in 2016 (commonly referred to as ‘DAC4’).

According to the agreed text, multinational enterprises or standalone undertakings with total consolidated revenue of more than €750 million in each of the previous two financial years (whether headquartered in the EU or otherwise) shall be obliged to publicly disclose income tax information in each Member State, as well as in each of the third country listed in Annex I of the EU Council conclusions on the EU list of non-cooperative jurisdictions for tax purposes or listed for two consecutive years in Annex II of the said EU Council conclusions.

In terms of the agreement reached, the Public CbCR Directive shall require reporting to take place using a standard EU template and in machine-readable electronic formats. Furthermore, the Public CbCR Directive shall specify the taxpayer who would bear the actual responsibility for ensuring compliance with the new reporting obligation.

The agreed text contemplates a comprehensive and final list of information to be disclosed in terms of the Public CbCR Directive in order to avoid the undue administrative burden and limit the revealed information to that which is strictly necessary for the purposes of effective public scrutiny.

The reporting requirement is set to take place within 12 months of the balance sheet date of the relevant financial year. In addition, the Public CbCR Directive illustrates the conditions under which a company may request a five-year deferral on the disclosure of certain information.

Member States shall be required to transpose the said directive into domestic legislation within 18 months in the event that the Public CbCR Directive is formally adopted as EU law.  

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