The EU public country-by-country (CbC) reporting proposal continues to advance, after two European Parliament Committees approved a compromise text on the proposed reporting requirement on June 14, 2021. The compromise text, which reflects political agreement on the rules for the initiative between the Council of the EU and the European Parliament, was previously approved by EU Member State representatives on June 9, 2021.

The rules in the compromise text would require multinational entities (MNEs) with a total consolidated revenue of at least EUR 750 million (in each of the last two consecutive financial years) and that are active in more than one country to publish income tax information in each EU Member State. These MNEs would also have to publish income tax information in each country listed on:

  • The EU list of non-cooperative jurisdictions, or
  • The EU "Grey List" for two consecutive years.


The European Commission presented a proposal on public CbC reporting requirements for certain MNEs (the public CbC directive) in 2016. However, until earlier this year, 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). As a result of certain countries changing their position and agreeing to support the proposal, the EU Council and the European Parliament approved mandates for their respective negotiating positions on the directive in March 2021.

Reporting requirements

Under the compromise text, reporting entities would have to disclose information including:

  • Nature of the company's activities
  • Number of full-time employees
  • Pre-tax profit or loss
  • Accumulated and paid income tax
  • Accumulated earnings.

Reporting entities would have to submit the required information to the relevant EU member state's trade registry, and that information would also have to be made publicly available online.

In certain situations, EU companies may defer disclosure of certain commercially sensitive information for a maximum of five years (reduced from six years initially proposed by the EU Council). The compromise text also does not include the European Parliament's initial request that local authorities pre-approve the deferral, and that EU member states transmit the omitted information confidentially to the European Commission.

Reporting would take place within 12 months from the date of the balance sheet of the financial year in question.

Next steps

The EU Council would next need to adopt its position, which is expected to be approved by the European Parliament after the summer recess. If approved, the directive would enter into force 20 days after it is published. EU member states would have 18 months from the date the directive enters into force to transpose the directive into their national legislation. The transposition deadline and application date depend on the date the official directive is published. For example, if the directive enters into force on October 1, 2021, member states would have until April 1, 2023 to transpose the directive into local law and the rules would apply from April 1, 2024. However, member states could also choose to apply the rules earlier.

For more information, contact your KPMG advisor.

Information is current to June 21, 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