Committees of the European Parliament and the Council of the EU have agreed to compromise text on a Directive on public country-by-country reporting (‘Public CbCR’). The text will amend Directive 2013/34/EU, which deals with financial reporting of certain types of undertakings (the Accounting Directive).
The agreed changes will require multinational groups or standalone undertakings with a total consolidated revenue of at least €750m, in that and the previous financial year, whether headquartered within the European Union or not, to publicly disclose the corporate income tax they pay in each EU Member State plus in each of the countries that are either on the EU list of non-cooperative jurisdictions for tax purposes (‘the EU’s blacklist’) or listed for two consecutive years on the list of jurisdictions that do not yet comply with all international tax standards but have committed to reform (the ‘EU’s grey list’).
This Directive aims to make corporate tax in the European Union more transparent by introducing the same reporting obligations for European businesses and non-European multinational companies doing business in the European Union through their branches and subsidiaries. While some commentators believe the proposal does not go far enough (particularly regarding aggregated vs. disaggregated information), the proposal nevertheless is a significant step towards multinationals’ tax information becoming available for public scrutiny.
This Bulletin follows on from our previous communication on 11 March 2021.