The directive applies to financial years starting on or after 22 June 2024. For international groups with a qualifying presence in the EU, Public CbCR represents not only a strict compliance obligation but also a strategic issue in terms of reputation, communication, and governance. In addition, international groups must take into account potential differences in national implementations of the directive and related sanction regimes.
Background and objectives of Public CbCR
The directive was formally adopted on 11 November 2021 and published on 1 December 2021 in the Official Journal of the European Union (OJEU). It amends the existing Accounting Directive (Directive 2013/34/EU) and introduces an obligation for certain large undertakings and groups to publish a public report containing information on the income tax they pay, broken down by country. The main objectives are to increase transparency regarding where multinationals generate their profits and pay taxes, to foster an informed public debate about their tax contributions, and to strengthen public and political scrutiny of aggressive tax structures. Member States are required to implement effective and dissuasive penalties for non-compliance with Public CbCR obligations.
Who falls within the scope of Public CbCR?
The reporting obligation applies to both EU-based groups and non-EU groups with substantial activities in the EU. In essence, the rules apply to multinational groups or stand-alone undertakings with consolidated net turnover of at least €750 million in each of the two most recent consecutive financial years, provided there is an entity or establishment in the EU.
For EU-based groups, the reporting obligation rests with the ultimate parent entity located in the EU or with the stand-alone undertaking. For non-EU groups, the directive applies where they have a medium-sized or large subsidiary or a qualifying branch in the EU within the meaning of the Accounting Directive. A subsidiary qualifies as medium-sized or large if at least two of the three thresholds relating to balance sheet total, net turnover, and/or average number of employees are exceeded, in both the reporting year and the preceding year.
Relationship with existing CbCR obligations
The European Public CbCR and the existing OECD CbCR framework are closely aligned in substance: both involve group-level reporting with comparable datapoints per jurisdiction, such as the nature of activities, revenue, profit or loss before tax, income tax paid and accrued, retained earnings, and the average number of employees. The key difference lies in the aggregation of jurisdictions.
Where OECD CbCR generally reports on a country-by-country basis and remains confidential—accessible only to tax authorities for risk assessment and information exchange—the European Public CbCR requires a detailed breakdown per EU Member State and per “listed” non-EU jurisdiction, combined with a single aggregated “rest of the world” category. In addition, European Public CbCR mandates public disclosure via the commercial register and the company’s website. As such, Public CbCR is explicitly aimed at a broad audience, including media, NGOs, investors, and employees. This means that Public CbCR cannot simply be a public copy of the OECD CbCR report; companies must actively ensure consistency, verifiability, and appropriate narrative explanations.
How can we help?
Public CbCR impacts tax, finance, reporting, legal, and communications. We can support you with:
- assessing whether—and from when—the group falls within the scope of Public CbCR, including the position of EU subsidiaries and EU establishments of non-EU groups;
- determining the most appropriate filing strategy, particularly for non-EU groups;
- designing and implementing an efficient and structured Public CbCR process (from data collection to publication);
- aligning Public CbCR with existing CbCR reporting and other compliance obligations;
- developing an appropriate narrative to support the published figures and tax strategy;
- monitoring national implementation across EU Member States and interpreting local specificities.
Want to learn more about Public CbCR?
Do you have questions about Public CbCR or its impact on your organization? Please contact your usual advisor or one of our Public CbCR specialists.
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FAQ
What are the main challenges when implementing Public CbCR within a multinational company?
The main challenges include collecting consistent data from different systems, aligning Public CbCR with existing reporting frameworks (such as private CbCR and ESG), and developing a clear narrative to explain the reported figures to stakeholders.
What are the reputational and communication risks of Public CbCR for companies?
As Public CbCR data is publicly available and accessible to media, NGOs and investors, there is a risk that figures may be misinterpreted, potentially leading to reputational damage or increased scrutiny of a company’s tax strategy.
How can companies prepare for Public CbCR requirements in the EU?
Preparation involves assessing whether the group is in scope, setting up an efficient reporting process, ensuring data accuracy, and aligning disclosures with internal governance and communication strategies.
