On 1 June 2021, the Council of the European Union (the “Council”) reached a political agreement with the European Parliament on the proposed directive on the disclosure of income tax information by certain undertakings and branches, commonly referred to as the public country-by-country reporting (“CbCR”) directive.
According to the press releases of the Council and of the EU Parliament, the agreed provisions would require multinational enterprises or standalone undertakings with a total consolidated revenue of more than €750 million in each of the last two consecutive financial years, whether headquartered in the EU or outside of it, to publicly disclose income tax information in each Member State. The reports would also extend to the EU list of non-cooperative jurisdictions for tax purposes (countries on the so-called “black” and “grey” lists).
The data provided would include the nature of the company’s activities, the number of full-time employees, the amount of profit or loss before income tax, the amount of accumulated and paid income tax and accumulated earnings.
The reporting would have to take place within 12 months from the date of the balance sheet of the financial year in question. The text sets out the conditions under which a company could request to defer the disclosure of certain information for up to five years.
The text, which is not yet publicly available, will now have to be endorsed by the relevant bodies of the Council and the European Parliament, after which the Council would adopt its position at first reading and the EU Parliament would proceed to vote on the text. Member States would then have 18 months to transpose the directive into national law.