The European Union has long positioned itself at the forefront of international efforts to enhance tax transparency. One of its most significant recent initiatives is the introduction of public country-by-country reporting (Public CbCR)—a framework designed to shed light on where multinational enterprises (MNEs) generate profits and pay taxes. This initiative aims to strengthen public trust, promote fair taxation, and provide citizens and investors with unprecedented insight into the tax behaviour of global companies.

Why the EU Introduced Public Country-by-Country Reporting

Traditional financial reporting consolidates data at the global or regional level, offering little detail on how much tax multinationals pay in each jurisdiction. The EU saw this as a transparency gap that could obscure aggressive tax planning or profit-shifting strategies: public CbCR seeks to close that gap.

Under the new rules, large multinational companies—whether headquartered in the EU or abroad—must publicly disclose key tax and business information for every EU country in which they operate, as well as for certain non-cooperative jurisdictions. This creates a clearer picture of corporate activities on a per-country basis, enabling stakeholders to better assess whether companies are paying their “fair share.”

Existing Transparency Requirements for Extractive and Logging Industries

Public CbCR builds on earlier sector-specific transparency rules embedded in the EU Accounting Directive. Mining, oil, gas, and logging companies have long been required to report payments to governments, broken down by country and by project. This includes taxes, royalties, bonuses, and other financial transfers related to resource extraction.

These measures align with the Extractive Industries Transparency Initiative (EITI), a global voluntary standard that promotes responsible management of natural resources. By revealing how much extractive companies pay to governments worldwide, the EU aims to empower citizens in resource-rich countries to hold their governments accountable.

What the Public CbCR Directive Requires

The Public CbCR rules were formally introduced by Directive (EU) 2021/2101, which amends Directive 2013/34/EU. They apply to MNEs with consolidated global revenues above EUR 750 million. Both EU-parented groups and non-EU multinationals with significant EU operations fall within scope.

From 2026 onwards (for most companies), multinationals must publicly disclose, for each EU Member State and designated non-cooperative jurisdictions:

• Corporate income tax paid and accrued
• Turnover (including with related parties)
• Number of employees
• Nature of activities
• Profits or losses before tax
• Retained earnings
• A list of subsidiaries located in and outside the EU

To ensure consistency and usability, companies must publish these data using a common template and in a machine-readable electronic format (xHTML with embedded iXBRL). This makes the information accessible not only to the public, but also to digital analysis tools, researchers, investors, and policymakers.

Which Entities Must Report?

Disclosure is required for medium-sized and large subsidiaries and comparable branches—generally those exceeding two of the following thresholds:

• Total assets: EUR 5 million
• Net turnover: EUR 10 million
• Employees: 50

Branches are in scope if they exceed the revenue threshold. Member States may adjust these thresholds, but the overarching framework applies across the EU.

Public Disclosure and Accessibility Requirements

The EU requires companies to file their reports with at least one official national register. Unless a “website exemption” applies, the same information must also be posted on the company’s website for at least five years, free of charge. One exception exists: banks already subject to disclosure obligations under Directive (EU) 2013/36/EU are exempt from Public CbCR.

Timeline: When Companies Must Start Reporting

For most multinationals with calendar-year reporting:

• First fiscal year in scope: 1 January 2025
• Latest publication date: 31 December 2026

However, timing varies for groups with non-calendar fiscal years. Some companies must report earlier—especially those with year-ends falling in mid-2024.

Furthermore, two EU Member States implemented Public CbCR ahead of schedule:

• Romania: from 1 January 2023
• Croatia: from 1 January 2024

This early implementation requires immediate attention from affected non-EU groups, particularly those with subsidiaries or branches in these countries.

The EU’s Country-by-Country Reporting Taxonomy Project

To aid companies in preparing their reports, the Commission launched a CbCR taxonomy project in 2025. It developed a prototype taxonomy, a report generator, and related guidance. These tools are voluntary, and companies remain responsible for ensuring legal compliance, but they provide a practical starting point for implementing the technical reporting requirements.

Implications for Multinationals: Challenges and Opportunities

Public CbCR introduces a major increase in administrative and compliance demands. Companies must generate a new, publicly accessible income-tax dataset—something many MNEs have never produced before, since OECD CbCR filings are confidential.

Key challenges include:

• Gathering granular, jurisdiction-level data
• Ensuring consistency between public CbCR, OECD CbCR, and financial statements
• Preparing data in a mandated structured format (xHTML + iXBRL)
• Managing reputational risk and public scrutiny
• Reconciling EU requirements with other emerging global disclosure regimes (e.g., Australian Public CbCR)

However, transparency can also yield strategic advantages. Many companies are integrating Public CbCR into their broader ESG, sustainability, or total tax contribution reporting. This allows them to contextualize the numbers, explain their tax strategy, and mitigate potential misinterpretations.

Next Steps for Non-EU-Headquartered Multinationals

Companies operating in the EU but headquartered elsewhere should begin their compliance preparations immediately. Key steps include:

1. Assess whether the group meets the EUR 750 million revenue threshold and whether EU subsidiaries or branches fall within scope.
2. Map data sources and identify gaps between OECD CbCR and EU Public CbCR requirements.
3. Build or upgrade reporting systems capable of producing machine-readable, jurisdiction-level tax data.
4. Decide on a disclosure strategy, including whether to integrate Public CbCR with ESG or sustainability reporting.
5. Monitor local implementation rules, as thresholds and requirements may vary between EU Member States.
6. Develop a communication plan to address potential public scrutiny.

Conclusion

The EU’s Public Country-by-Country Reporting Directive marks a significant evolution in global tax transparency. By requiring multinationals to openly disclose their tax contributions across jurisdictions, the EU aims to foster fairness, discourage aggressive tax planning, and strengthen public confidence in corporate tax behaviour.

While the new requirements pose operational and strategic challenges, they also provide an opportunity for companies to demonstrate responsible tax governance and engage constructively in the global conversation about transparency.

References

Deloitte. (2025, October 01). EU Public Country-by-Country Reporting obligations for EU and non-EU-headquartered multinationals from 22 June 2024. Retrieved from Deloitte: https://www.deloitte.com/global/en/services/tax/perspectives/eu-public-cbcr-country-by-country-reporting.html

European Commission. (2025). Public country-by-country reporting. Retrieved from European Commission: https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company-reporting-and-auditing/company-reporting/public-country-country-reporting_en

Photo:
https://a-us.storyblok.com/f/1018982/f98a280841/transparency-social-mod-1200×628.jpg