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August 10, 2022

Mazars: The EU Public Country-by-Country reporting (CbCR) enters into force

  • Member States will have to transpose the directive into national law by 22 June 2023
  • The reporting will require both EU and non-EU headquartered multinational groups with a consolidated annual turnover of over €750m to publicly report income tax information
  • The new measure will impact around 6,000 multinational companies active on the EU market

Public Country-by-Country reporting (CbCR)  is officialised with the publication of Directive (EU) 2021/2101, amending Directive 2013/34/EU on reporting of income tax information by certain undertakings and branches.

In an effort to curb tax avoidance and enhance tax transparency, public CbCR reporting will require both EU and non-EU headquartered multinational groups with a consolidated annual turnover over €750m to publicly report income tax information.

The annual public CbCR report is due in 12 months from the balance sheet closing date. The Directive will enter into force on 21 December 2021 and needs to be transposed in the national legislation of each EU Member State by 22 June 2023. First public reporting is due for the financial year starting on or after 22 June 2024, at the latest. This means that in the majority of cases, for a financial year that is starting on 1 January, by way of example, the deadline for public CbCR reporting for the year 2025 will be 31 December 2026.”, mentioned Liviu Gheorghiu, Senior Tax Manager, Mazars Romania.

According to data published by the European Commission, the new measure will impact around 6,000 multinational companies active on the EU market, out of which approximately 2,000 are based in the EU.


Reporting requirement


Ultimate parent entities of multinational groups, governed by the law of a Member State, are required to prepare, publish and make accessible a report on income tax information, provided that the consolidated revenue exceeds €750m for the last two consecutive financial years.

The report must also be prepared, published, and made accessible by medium-sized and large EU subsidiaries or branches of a multinational group if:

  • the ultimate parent entity which controls the subsidiary or the subsidiary that controls the branch is not governed by the law of an EU Member State. However, exceptions apply if the non-EU ultimate parent prepares, publishes, and makes available the report information following the criteria set out by the Directive.

The reporting requirement does not apply to ultimate parent entities and related subsidiaries or branches if they are established or have fixed places of business or permanent business activity only within a single EU Member State and no other tax jurisdiction.

There are no reporting obligations for multinational groups in the banking and extractive and logging industries, which are already subject to public reporting under Directive 2013/36/EU.


Content of the report on income tax information


The report shall include information relating to the activities of group members consolidated in the financial statements of the multinational group of the relevant financial year.

The information required comprises the following areas:

  • Name of the ultimate parent entity, financial year concerned, list of subsidiaries consolidated in the financial statements established in the EU or other tax jurisdictions;
  • A brief description of activities;
  • Number of employees;
  • Net turnover (including related-party turnover);
  • Profit or loss before tax;
  • Amount of income tax accrued;
  • Income tax paid;
  • Amount of accumulated earnings.

The reporting information will be presented using a template and electronic reporting format, which will be drafted by the European Commission at a later implementation stage. The Directive also provides for the option to temporarily omit for a five-year period certain information, should the disclosure of such information be commercially sensitive”, mentioned Adrian Mutea (photo), Tax Manager, Mazars Romania.


Publication of the report


The annual report shall be published no later than 12 months from the balance sheet closing date, free of charge, on the website of the entity subject to the reporting obligation, in at least one of the official languages of the EU. The report must be accessible on the website for a period of 5 consecutive years.


Statutory audit requirements


The statutory audit report of a reporting entity shall state whether for the financial year preceding the audited financial year, the entity was required to publish the report and whether the reporting was performed in line with the provisions of the Directive.















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