Public country-by-country reporting is introduced within the EU

On November 11th, 2021, members of the European Parliament adopted the new public country-by-country reporting rules, CbCR. This means that Sweden must have implemented the directive in its national legislation by 2024.


The directive on public CbCR was presented as early as 2016, but due to opposition it was delayed. It was not until June 2021 that the EU Council announced that a provisional agreement had been reached with the European Parliament on the introduction of the public CbCR rules. This agreement was officially voted on November 11, 2021, i.e., the directive was adopted.

The meaning of the directive

With the adoption of the proposed Public CbCR Directive, multinational companies operating in more than one EU country, with a global turnover exceeding euro 750 million, will need to publish publicly how much tax they pay in each EU country. The information must be published within one year after the end of the financial year on the companies’ website. The information must be published in one of the official languages ​​of the EU.

Entities covered by the Directive

As mentioned above, the Public CbCR Directive covers multinational companies operating in more than one EU country and has a turnover in excess of euro 750 million. Furthermore, the Public CbCR Directive mentions that subsidiaries and branches below the euro 750 million threshold must also publish information about their taxation if their purpose is only to help multinational companies avoid the new reporting requirements.

The Public CbCR Directive states that the ultimate parent company, or the independent companies established in the EU and covered by the reporting obligation, is collectively responsible for ensuring that the reporting obligation is complied with.

Companies that are already required to publish financial information publicly (e.g., banks and other financial institutions) will not have to report under the new directive.

The information to be published

The information to be published publicly is divided into different categories, such as the company’s operations, number of employees, the amount of profit or loss before tax, accumulated and paid income tax and accumulated income. The information must be available free of charge and in an electronic reporting format which is machine readable.

The information should be broken down by each EU jurisdiction and by non-EU jurisdiction included in the list of jurisdictions that do not cooperate with the EU in tax matters (countries on the so-called “black” and “gray” lists). However, exceptions are allowed if the report explicitly states that related companies in countries on the list are not directly involved in transactions with group companies in an EU country. Information on all other countries can be provided in aggregate form.

There are provisions in the Directive that allow certain data to be temporarily excluded from reporting, but these are limited. For example, certain information may be temporarily omitted if disclosure would seriously damage the company’s market position. Publication may be postponed for a maximum of five years. If a certain information is not included in the report, companies must mention it and provide an explanation as to why the information was omitted.

Transposition of the Directive

The directive enters into force 20 days after its publication in the Official Journal of the European Union. Member States will then have 18 months to transpose the directive into national law. This means that the companies covered by the directive will have to comply with the first provisions of the Directive by mid-2024.

Our comment

After several years of discussions, the rules on public country-by-country reporting are finally adopted. The directive is expected to increase transparency of where large multinational companies pay taxes and thus set a precedent for the rest of the world.

As we mentioned in our previous notices, the directive means a significant change for the companies covered, where routines and reporting will need to be reviewed to manage the risks that may arise. For multinational companies, this may involve risks related to compliance with the directive, e.g. if there is a risk that competitiveness will be affected, if confidential business information may be disclosed or if it may lead to the company’s reputation being damaged by misinterpretation of the information published. These issues will now need to be addressed.

If you want to know more about the directive and how your company is affected, you are welcome to contact us.