Public Country-by-Country Reporting (CbCR): Corporations in the EU will have to disclose their profits and taxes in future & the US parliament puts forward a similar proposal - Tax and Legal blog

2021-06-07_08-41-15

On Tuesday evening of last week, negotiators from the EU states and the European Parliament reached a preliminary agreement on the core of the new directive on “Public Country-by-Country Reporting”. The final approval of the Parliament and the Council of Ministers is considered a formality.

Similarly, on 12 May, the US parliament had brought forward a proposal that would direct the Securities and Exchange Commission (SEC) to require large publicly traded corporations to disclose certain tax and non-tax information on a country-by-country basis.

EU Public CbCR requirements

Multinational groups operating in the EU with a turnover of at least EUR 750 million in the last two consecutive years will be affected by the new law. Tax income information for each EU member state and countries on the EU's "blacklist" of tax havens would need to be disclosed on a country-by-country basis and would include the following:  

  • Nature of the activities;
  • Number of employees;
  • Total net turnover (derived from both third party and intragroup transactions);
  • Profit before tax;
  • Amount of income tax payable in the country as a result of the profits derived in the current year in that country;
  • Amount of income tax actually paid during the year; and
  • Accumulated earnings.

The information would need to be made available in a specific report according to a common EU template and made accessible to the public for at least five years on the company’s website. Companies would also have to file the report with a business register within the EU.

Should the EU proposal go through, which is pretty certain, member states will have eighteen months to transpose the directive into national law.

US proposal

On 12 May the US House Financial Services Committee voted to approve legislation that would direct the SEC to require publicly traded corporations with annual revenues of USD 850 million or more to disclose certain tax and non-tax information on a country-by-country basis.

It is unclear when the House's proposal will be brought to the floor for a vote by the entire chamber or if it will be considered as a stand-alone measure or as part of a larger tax package. Also unclear is when—or whether—the Senate version will be taken up in the Committee on Banking, Housing, and Urban Affairs.

For more information, please do not hesitate to reach out.

Key contacts

Salim Damji_2

Salim Damji - Partner, Transfer Pricing 

Salim is a Tax Partner with more than 20 years of experience in transfer pricing and business model optimisation. He has worked in a variety of countries including the UK, Switzerland, and the US.

Salim has worked with a number of multi-national groups assisting them in their transfer pricing audits, documentation, and planning issues. Salim’s main focus over the past few years has been intellectual property planning, business restructuring, and APAs.

Salim has been continuously named as one of the world’s leading transfer pricing advisors since 2005 in different journals.

Email

Martin Krivinskas blog

Martin Krivinskas – Partner, Transfer Pricing

Martin is an international tax partner and based in Zurich. He has 20 years experience, based mainly with Deloitte in the UK: he joined Deloitte Switzerland in June 2019.

He works mainly with large multinationals and has extensive experience of helping clients with all international tax matters, in particular group restructuring projects, group financing arrangements, managing intangible assets and transfer pricing.

He works with clients across a number of industries and has particular experience of supporting clients in the life sciences, industrial products and consumer products industries.

He is chartered Accountant and chartered Tax advisor.

Email

Eberli_BLOG

Kayla Eberli – Senior Manager, Transfer Pricing

Kayla is a Senior Manager in the Business Tax team of Deloitte Switzerland. She has over 6 years of experience providing transfer pricing advisory and compliance support to multinational enterprises across a spectrum of industries and manages projects in the field of consulting to global compliance.

Email

Aleksandra Skiba 110x110

Aleksandra Skiba  - Senior Consultant, Transfer Pricing

Aleksandra is a Senior Consultant in the Business Tax team of Deloitte Switzerland with over 3 years of experience. She works on advising large multinationals in a variety of industry sectors in the field of international taxation and transfer pricing, and more specifically in relation to CbCR and TP Documentation.

Email

Florian Hildebrand

Florian Hildbrand – Consultant, Transfer Pricing

Florian is a Consultant in the Transfer Pricing team of Deloitte Switzerland. He is involved in various transfer pricing projects with a focus on transfer pricing documentation, benchmarking studies and value chain analyses.

Email

Comments

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Comments are moderated, and will not appear until the author has approved them.