The European Commission (EC) published a revised regulation that provides the common template and electronic reporting formats for the EU public country-by-country (CbC) reporting directive on 21 October 2024.
This follows after the conclusion of a public consultation on the draft template and reporting forms on 6 September 2024.
The updated regulation includes an annex detailing the reporting form, which aligns with those presented during the public consultation and features only minor amendments.
On 18 October 2024, the updated regulation received approval from the Accounting Directive Committee, which is required before its adoption by the European Commission. The regulation will take effect 20 days after being published in the EU’s Official Journal and will apply to CbC reports for financial years beginning on or after 1 January 2025.
The updated documents clarify that:
Section 1 – General information
In-scope groups can include supplementary information in the CbC report using text, images, or other formats. The name of the ultimate parent of the group / of the standalone undertaking shall correspond to the name provided in the statutes or instruments of incorporation of the undertaking to which the report on income tax information relates.
Section 2 – Overview of information on a country-by-country basis
The full name of the Member State or tax jurisdiction of a given Member State or to a given tax jurisdiction, including a country in the European Economic Area other than a Member State of the European Union, as mandated by the applicable national law, should be disclosed.
Section 3 – List of subsidiaries and activities
This section will only include the list of subsidiaries. The name of the subsidiary undertakings in the Member State or tax jurisdiction shall be disclosed for each subsidiary undertaking consolidated in the financial statements of the ultimate parent undertaking in respect of the relevant financial year and presented in the line corresponding to the Member State or tax jurisdictions in which that subsidiary is established. Establishments, fixed places of business or permanent business activities other than those operating via a subsidiary undertaking need not be disclosed.
The information required by the line entitled ‘Brief description of the nature of activities in the Member State or tax jurisdiction’ shall be disclosed based on the following list of main business activities, taking into account all the activities in a given country:
- Research and Development
- Holding or Managing Intellectual Property
- Purchasing or Procurement
- Manufacturing or Production
- Sales, Marketing or Distribution
- Administrative, Management, or Support Services
- Provision of Services to Unrelated Parties
- Internal Group Finance
- Regulated Financial Services
- Insurance
- Holding Shares or Other Equity instruments
- Dormant
- Other
For instance: “Manufacturing or Production / Sales, Marketing or Distribution.” In the case where the activities are reported as ‘Other,’ no further description is required.
Section 4 – Omitted information
National law under Article 48c(6) of Directive 2013/34/EU may allow temporary omission of information. Each omitted item must be described with a reasoned explanation. For previously omitted information that is now disclosed, a description is required in the current financial report.
Section 5 (non-mandatory)
Explanations for material discrepancies between income tax paid and accrued are required only when mandated by applicable national law. Unless provided otherwise by the applicable national law, it is left to the discretion of reporting undertakings whether or not to provide such information. Should no such information be disclosed, this section may be omitted.
