EU Public Country-by-Country Reporting obligations for EU and non-EU-headquartered multinationals from 22 June 2024

Overview of the Directive on EU Public Country-by-Country Reporting

The first proposal for EU Public CbCR dates back to April 2016. At the time, the Commission presented – in a direct response to BEPS Action 13, which resulted in the OECD globally implementing Country-by-Country Reporting (CbCR) – a draft Directive on EU Public CbCR. At the time, this draft did not receive sufficient political support from the EU member states. During the COVID-19-pandemic, the draft resurfaced and received broad political endorsement.

In December 2021, the EU adopted an amendment to Directive 2013/34/EU to introduce new rules regarding the disclosure of income tax information by certain undertakings and branches (Directive (EU) 2021/2101). EU Public CbCR aims to increase transparency and to provide more scrutiny of MNEs' EU income tax positions and strategies.

EU Public CbCR requires all MNEs with consolidated revenues exceeding EUR 750 million and operations in multiple EU member states to annually disclose certain income tax information on a country-by-country basis to the general public. In-scope MNEs are both large EU-parented groups and large non-EU-parented groups. In both cases, data and information needs to be disclosed for all subsidiaries and branches in the EU and also for defined countries outside of the EU (see below). The Directive only requires a disclosure for medium-sized and large subsidiaries (i.e., subsidiaries that, at the balance sheet date, exceed two of the following three criteria) and comparable branches:

1. Total assets: EUR 5 million;
2. Net turnover: EUR 10 million;
3. Average number of employees: 50.

A branch only needs to meet the revenue threshold. However, the EU member states may apply different thresholds to determine whether a subsidiary or branch qualifies as medium or large (see below).

The EU Public CbCR dataset must be prepared in a machine-readable format using the currency of the consolidated financial statements and must be disclosed in one official EU register and - if no “website exemption” applies - also on one internet website that is freely accessible to the general public for at least 5 years. A general exemption applies for banks subject to income tax disclose requirements under Directive (EU) 2013/36/EU.

On 2 December 2024, the Commission published the final version of the common template and data schema. All EU-based groups must create their EU Public CbCR, which they must disclose (in a local official language) in their own member state in their official EU register, as an XHTML dataset with iXBRL markup. Non-EU-based groups may also create an XHTML dataset and disclose it in one official EU public register (see below) or may use another machine-readable format, for which no further details are yet available.

Under the Directive, the following information must be disclosed - for all in-scope jurisdictions - for all fiscal years beginning on or after 22 June 2024 at the very latest within 12 months after year-end in one official EU register and on one internet website:

1. Name of the ultimate parent undertaking or stand-alone undertaking;
2. Nature of activities;
3. Number of full-time equivalents;
4. Revenues;
5. Profit or loss before income tax;
6. Current income tax accrued;
7. Current income tax paid;
8. Accumulated earnings at year-end.

This information must be provided - on a jurisdictional basis - for all in-scope subsidiaries and branches for each EU member state, for each member state of the European Economic Area (EEA; i.e., Iceland, Liechtenstein, and Norway), and for each state that is (or that has been) included on the EU list of non-cooperative jurisdictions (i.e. annex I and annex II). All other jurisdictions are aggregated into “All other tax jurisdictions (aggregated basis).” More details are included and explained in the common template and data schema.

The Directive entered into force on 21 December 2021. All EU member states were given 18 months (i.e. until 22 June 2023) to transpose the Directive into local law. EU Public CbCR applies - at the very latest - for all fiscal years beginning on or after 22 June 2024 (with an earlier effective date being possible). An overview of the implementation in the EU member states can be found in the Deloitte Global Tax Library (scroll to “Quick Reference” and then to “EU public country-by-country reporting“).

Overview of the German implementation of EU Public CbCR

On 19 June 2023, Germany published its final implementation legislation in the Federal Gazette. The legislation requires all in-scope MNEs to disclose defined income tax information on a country-by-country basis to the general public for all fiscal years beginning on or after 22 June 2024. The German legislation is very business-friendly (including the so-called “website exemption”) and is in line with the requirements as set forth in the Directive (Tax@Hand). The implementation legislation was included in the German Commercial Code (HGB) under Sections 342-342p, which are applicable to all large MNEs. Germany did not nationally extend the EU list of non-cooperative jurisdictions.

Compared to the EU Directive, Germany applies more generous criteria for testing whether MNE groups are in scope of EU Public CbCR. The German domestic criteria are: a) EUR 7,5m balance sheet total; b) EUR 15m net revenue; and/or c) 50 average number of employees during the fiscal year. Public CbCR applies to branches with more than EUR 12m of net sales.

During the legislative process, Germany tightened the standard rules from the Directive in two areas: The period during which confidential information can be excluded from disclosure (so-called “safeguard clause”) was reduced from five to four years. Furthermore, the maximum fine for non-compliance was increased to EUR 250,000, which indicates that strict enforcement should be expected. In Germany, the fine is not automatic and the maximum amount may therefore only be assessed in extreme cases of non-compliance.

Advantages of Germany as a disclosure jurisdiction for non-EU-parented MNEs

EU Public CbCR differs from the existing non-public CbCR in terms of content and scope. It only includes EU-, EEA-, and non-EU subsidiaries and branches in non-cooperative jurisdictions (see above). Furthermore, while regular CbCR is filed by most MNE only in their own headquarter jurisdiction, EU Public CbCR must be disclosed in the EU in one official public register. EU-parented MNEs must disclose their EU Public CbCR in their headquarter jurisdiction. For all non-EU-parented MNEs, EU Public CbCR will trigger a new EU public income tax disclosure requirement.

This new EU disclosure may be fulfilled in one Member State, in which the non-EU-parented group has a qualifying nexus (see above). If a non-EU-parented group has a nexus in more than one EU member state, it may freely pick the most favorable EU member state for its disclosure. EU Public CbCR must then be disclosed only in this EU member state as an XHTML dataset with iXBRL markup (see above). Furthermore, depending on the local implementation legislation in this EU member state, an internet website disclosure of the EU Public CbCR may also be required.

For many non-EU-parented MNEs, Germany will be an attractive hub for their EU Public CbCR disclosure. Most non-EU-parented groups have a nexus in Germany as the largest EU market. Germany allows for an election to bridge the (existing) CbCR XML dataset into the (new) EU Public CbCR XHTML dataset. In Germany, the EU Public CbCR XHTML dataset must be prepared and digitally disclosed in the commercial register in German language. Since commercial register disclosure in Germany is only required within 12 months after year-end, an end-to-end integration and full reconciliation of CbCR and EU Public CbCR is possible. Germany has implemented the “safeguard clause” and the “website exemption”, which avoids a full second disclosure on an internet website that is freely accessible to the general public for 5 years.

Since 2016, Deloitte Germany has offered a CbCR outsourcing service and already supports many non-EU-parented MNEs with conversions of their foreign CbCR XML into a German CbCR XML dataset (including local e-filing in Germany). From 2025, Deloitte Germany has extended its service to EU Public CbCR and can support all non-EU-parented groups with German nexus with a digital bridge of their (existing) foreign CbCR XML dataset into their EU Public CbCR XHTML dataset (including e-disclosure in the German commercial register), which exempts all other EU subsidiaries and branches from disclosures or filings. All German disclosures qualify for “website exemption,” which is highly attractive.

Action steps for non-EU-parented MNEs preparing for their first EU Public Country-by-Country Reporting disclosure

For many in-scope MNEs who prepare their consolidated financial statements on a calendar-year basis, EU Public CbCR first applies for the entire EU from 1 January 2025. The first EU public register filing (and potentially also the website disclosure) are then due at the very latest by 31 December 2026. For certain in-scope MNEs with deviating year-ends (e.g., 30 June 2024 or 30 September 2024), EU Public CbCR already applies since 1 July 2024 or 1 October 2024.

For certain MNEs, EU Public CbCR may already apply from 1 January 2023 in Romania and from 1 January 2024 in Croatia, which requires immediate attention. A status overview of EU Public CbCR in Romania, which is the first EU member state to require EU Public CbCR for non-EU-based MNEs, is provided in a webcast from 5 December 2024 hosted by Deloitte Bucharest (note: online registration for accessing the recording). An update on experiences with and surprises from the first EU Public CbCR disclosures in Romania is provided in Deloitte Dbriefs Asia Pacific from 20 February 2025 (note: online registration for accessing the recording). 

EU Public CbCR will increase the administrative burden for all in-scope MNEs as they will need to disclose, for the first time, jurisdictional income tax information to the general public. This new disclosure only relates to EU, EEA and certain “blacklist” countries, but is currently not legally required and is currently also not yet prepared on a voluntary basis by most in-scope MNEs. MNEs that are subject to both EU Public CbCR and Australian Public CbCR should note that the list of disclosure jurisdictions under both rulesets may differ.

The common template published by the Commission on 2 December 2024 does not allow MNEs to provide any explanations on the content of their XMTML dataset, which they must publish in one official EU register. Many MNEs want to supplement their EU Public CbCR dataset with additional explanations and want to contextualize the information from the dataset to mitigate any potential misinterpretation by the general public. This can be achieved via extended website disclosure or via integration.

Integrating EU Public CbCR into an external or new external reporting framework (e.g. ESG, sustainability, total tax contribution, or investor reporting (including Corporate Sustainability Reporting Directive (CSRD)) allows MNEs to explain and contextualize the content of their public CbCR dataset(s). An integrated public CbCR is not only important in the context of EU Public CbCR, but might also simplify reporting requirements and minimize tax exposure under OECD Pillar 2 (e.g., CbCR-Safe-Harbour).

Support from Deloitte on the Public CbCR

Deloitte can provide support and guidance on the new EU Public CbCR disclosure requirements for all in-scope non-EU-parented groups in all EU member states. More details on EU Public CbCR for non-EU headquartered MNEs can be found in Deloitte Dbriefs Asia Pacific from 20 February 2025 (note: online registration for accessing the recording). If, in addition, you are subject to the new Australian Public CbCR, Deloitte can also support you with this new external disclosure (Tax@Hand). More details on Australian Public CbCR can be found in a webcast hosted by Deloitte Australia on 23 January 2025 and in Deloitte Dbriefs Asia Pacific from 20 February 2025 (note: online registrations for accessing both recordings).

Deloitte can also help you evaluate whether Germany is a suitable central hub for disclosing your EU Public CbCR and can also provide an outsourcing service for the conversion of your foreign CbCR XML dataset into an EU Public CbCR XHTML dataset if you choose Germany as your central EU hub. On the basis of the final EU template for EU Public CbCR (see above), Deloitte can support you with a “mock-up EU Public CbCR dataset” (e.g. 31 December 2023 or 31 December 2024) based on your latest Country-by-Country Reporting dataset, which is helpful to better understand how the first dataset for fiscal year 2025 could look like and which per-jurisdiction disclosures are likely to be required. Furthermore, Deloitte can also assist with designing external communication strategies and your website disclosure. 

Please reach out to Deloitte for further assistance and queries related to EU Public CbCR or Australian Public CbCR.