The European Union (EU) has long been at the forefront of furthering corporate transparency and accountability. A significant step in this direction was the introduction of nonpublic country-by-country reporting (CbCR) rules in the EU for fiscal years beginning on or after January 1, 2016. The nonpublic CbCR rules require multinational groups with an annual consolidated turnover of at least €750 million to prepare and submit a report including certain data points to help tax authorities assess transfer pricing risks. These reports are automatically exchanged among the tax authorities of EU member states.
After years of discussions, the EU adopted a proposal in 2021 for a directive (henceforth referred to as “the directive”) to introduce public CbCR rules in addition to the already existing nonpublic CbCR rules. These public CbCR rules require large multinational enterprises (MNEs) operating within the EU to publicly disclose specific tax-related information on a country-by-country basis.
This article provides an overview of the background, scope, and impact of the public CbCR rules concerning US MNE groups, followed by a summary and key takeaways.
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