Public Country-by-Country Reports on the Way for EU Countries18th November 2021
Like the rest of the world, the EU may be focused on the OECD’s global tax plan but if you think that means tax avoidance initiatives have fallen off the bloc’s radar, well, think again. Case in point: Public country-by-country reports are official thanks to a thumbs-up by the European Parliament on November 11. What does this mean for multinational companies? Starting at some point in 2024, MNEs with annual revenues of more than EUR 750 million ($860 million roughly) that do business in more than one EU country have to start publicly disclosing the amount of tax they pay in each EU country—as well as countries on the EU’s black and gray list. Of course, EU member states will have to adopt the directive into local legislation, and they’ll have 18 months after the directive enters into effect to do so. Companies will have to report—on a country-by-country, not aggregated, basis—taxes paid, the nature of their business, the number of employees, and the profits and losses before taxes. If entities below the thresholds are suspected of being used to get around the reporting requirement, then they’ll have to publicly report, too.