EU negotiations on public Country-by-Country reporting set to resume

EU negotiations on public Country-by-Country reporting

New support for public Country-by-Country reporting proposal breaks a deadlock to allow EU negotiations to begin


Certain EU member countries have recently changed their position to support a long-stalled proposal for a public Country-by-Country (CbC) reporting rule. As a result, the EU Council and European Parliament are expected to move forward shortly with negotiations, after approving mandates for their negotiating positions on March 3 and 4, 2021, respectively.

The public CbC reporting proposal has been deadlocked since the European Commission (EC) presented it in April 2016. However, following this new support, both the EU Council and the European Parliament have indicated that they are now committed to starting the negotiation process and aim to reach an agreement before June 30, 2021.


The EC presented a proposal on public CbC reporting requirements for multinational groups (MNEs) headquartered in the EU with a total consolidated group revenue of at least EUR 750 million (the public CbC directive) in 2016. However, until recently, the proposal remained effectively deadlocked, in large part due to disagreements among EU member states on the legal basis of the proposal (generally whether it required a qualified majority or unanimous approval by the EU Council).

Who would be affected?

The public CbC reporting directive would apply to EU headquartered companies with a consolidated net revenue exceeding EUR 750 million in each of the last two consecutive financial years. The rules would also be relevant for non-EU headquartered companies if they exceed the EUR 750 million threshold, and their EU presence includes either medium-sized or large subsidiaries, or branches that meet certain revenue criteria.

What would have to be reported?

Under the EU Council's mandate, reporting entities would need to report the following information separately for each member state, as well as each country listed on the EU list of non-cooperative jurisdictions for tax purposes:

  • Nature of activities
  • Number of employees
  • Net revenues, including transactions with related parties
  • Pre-tax profit or loss
  • Corporate income tax paid
  • Accumulated earnings.

The EU Council's mandate would require this information on an aggregate basis for other countries. The EU Parliament's mandate includes more extensive publication requirements including separate presentation for each tax jurisdiction outside of the EU and the public disclosure of additional information such as:

  • Revenue split between related and non-related party transactions
  • Fixed assets
  • Preferential tax treatments
  • Government subsidies
  • Political donations.

Under the EU Council's mandate, companies covered by the rules could choose not to publicly disclose commercially sensitive information (unless it relates to a country on the EU list of non-cooperative tax jurisdictions), but would have to disclose and explain the omission. Further, these companies would generally have to make such omissions public in a future report within six years from the omission. Under the EU Parliament's mandate, companies would require local authority approval to temporarily omit the disclosure of commercially sensitive information, and would require the transmission of that information to the EC.

How to report?

The reporting entity would have to publish the required information on their website. The reporting entity would also have to file the report directly with the national central register, commercial register or companies register in the relevant member state. A non-EU headquartered company could elect to publish the report on their website and designate one of their EU subsidiaries or branches to file the information with their trade registry.

When might the new rules apply?

Although the draft directive does not include a concrete start date, it is proposed that member states would include the provisions into their national legislation within two years from the date the directive enters into force, to apply no later than the beginning of the first financial year beginning on or after one year from the transposition date.

Note that this timeline could change and member states could choose earlier transposition and reporting deadlines.

For more information, contact your KPMG advisor.

Information is current to March 8, 2021. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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