Tax transparency is here to stay. As anyone involved in the tax arena will be aware, there has been a paradigm shift in the global tax landscape which has resulted in public and political pressure for action to tackle perceived harmful tax practices, particularly by corporate entities.

Information reported under existing ‘non-public’ CBCR requirements is certainly helping tax authorities gain a better understanding of the overall tax picture of an MNE business and structure. However, one other key motivation of institutions such as the EU in their work around tax transparency, is to ensure public accountability and transparency, and promote a more informed public debate around the level of compliance of certain MNEs. Therefore, in parallel with ‘non-public’ CBCR, the EU is also introducing ‘public’ CBCR rules.

Public vs. non-public CBCR

Public CBCR brings additional considerations and concerns to be weighed against the perceived benefits. For multinationals, the extent to which the scales tip either way in this balance will determine whether the final rules will lead to additional compliance because of different data points, whether it will lead to a loss of competitiveness through disclosure of confidential business information or by going further than other international norms, or whether it will lead to reputational damage through misinterpretation of ‘one-size-fits-all’ disclosure formats. Such issues can only be properly evaluated on the basis of a sound understanding of what the different rules say and how they interact with each other.

EU public CBCR

In January 2016 the European Commission indicated in its Anti-Tax Avoidance Package that it was analyzing how certain tax information could be made public by multinational firms on a country by country basis, in response to the recommendations for public country-by-country reporting made by the European Parliament in 2015. On April 12, 2016 the European Commission’s proposal on public CBCR was officially published.

The initiative was in deadlock until early 2021, in part due to disagreements on its legal basis, i.e. whether the proposal would need to be based on:

  • article 50 of the Treaty on the Functioning of the European Union (TFEU), meaning that it would be subject to the ordinary legislative procedure – requires qualified majority voting in the Council, or 
  • article 115 TFEU, meaning that it would be subject to the special legislative procedure, the common procedure used in tax matters and subject to unanimous approval at Council level.

Following a change of position by some Member States, the Council’s Portuguese Presidency invited Member States to express their views on a new text and, during a February 2021 public debate, the majority of Member States expressed their support for the initiative and agreed to move forward under article 50.

After three rounds of interinstitutional negotiations between the Council and the European Parliament, mediated by the European Commission (so called “trilogue”), on 1 June 2021, the Council and the Parliament announced that a provisional political agreement had been reached on a compromise text.

The text was subsequently approved by the relevant European Parliament Committees and by Member State representatives in Coreper (the Permanent Representatives Committee). The Council adopted its position at first reading on September 28, 2021. On November 11, 2021, the European Parliament formally adopted the text, at second reading.

The date of entry into force of the rules (Directive (EU) 2021/2101) is December 21, 2021 (the 20th day following the date of its publication in the Official Journal of the EU) . EU Member States have until June 22, 2023 to transpose the Directive into national law and the rules will apply 12 months after the transposition deadline, i.e. from the commencement date of the first financial year starting on or after June 22, 2024. Individual Member States may choose to apply the rules at an earlier date.

The rules

The new rules will require multinational groups with a total consolidated revenue of EUR 750 million to report either if they are EU parented or otherwise have EU subsidiaries or branches of a certain size. 

The report will require information on all members of the group (i.e. including non-EU members) within seven key areas: brief description of activities, number of employees, net turnover (including related party turnover), profit or loss before tax, tax accrued and paid, and finally the amount of accumulated earnings. To the extent there are material discrepancies between reported amounts of income tax accrued and income tax paid, the report may include an overall narrative providing the explanation for these discrepancies. 

The information must be broken down for each EU Member State where the group is active and also for each jurisdiction deemed non-cooperative by the EU or that has been on the EU’s “grey” list for a minimum of two years. Information concerning all other jurisdictions may be reported on an aggregated level.

Reports are to be published in an EU Member State business register, but also on companies’ websites, where they should remain accessible for at least five years. Where the ultimate parent is not governed by the law of an EU Member State, the reporting will generally have to be done by the EU subsidiaries or branches, unless the ultimate parent publishes a report including those subsidiaries and branches.

There is a carve out in this respect for ‘small’ subsidiaries and branches as well as a general carve out, subject to conditions, for financial sector groups that report under the CRD IV rules. Responsibility for the reports will lie with the management of the ultimate parent (if in the EU) or, in other cases, with the management of the EU subsidiaries or branches concerned. 

For more information on EU country-by-country reporting rules, please refer to the KPMG Overview: An EU perspective on country-by-country reporting.

KPMG insights into CBCR


Public CBCR

Non-public CBCR 

Official documentation and resources


  • EU Commission website on company reporting

Non-public CBCR

  • EU Council Directive 2016/881 (PDF 385 KB) (amending Directive 2011/16/EU) as regards mandatory exchange of information in the field of taxation
  • OECD Transfer Pricing and CBCR – Action 13 2015 Final Report (PDF 1.55 MB)
  • The OECD maintains an up to date list (PDF 206 KB) of signatories of the Multilateral Competent Authority Agreement on the Exchange of CBCR (CbC MCAA)
  • OECD Automatic Exchange Portal on CBCR
  • Final US country-by-country reporting regulations (PDF 250 KB)

Public CBCR

  • Directive (EU) 2021/2101 of the European Parliament and of the Council of 24 November 2021 amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches - final text.
  • EU Commission webpage on Public Country-by-Country Reporting / Corporate tax transparency.



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