This content is from: European Union

European Union: European Parliament adopts legislative resolution on public CbCR

Bob van der Made

On July 4 2017, the European Parliament adopted by 534 votes to 98, with 62 abstentions, a draft legislative resolution on the European Commission's proposal for a directive of the European Parliament and of the Council amending Directive 2013/34/EU as regards to the disclosure of income tax information by certain undertakings and branches/public country-by-country reporting (public CbCR). It also voted in favour of taking this to the next level in the EU's decision-making process.

The amendments adopted are summarised on the European Parliament's website as follows:

  • Ultimate parent undertakings governed by their national laws and having a consolidated net turnover of €750 million ($899 million) or more should make publicly available, free of charge, a report on income tax information on an annual basis.
  • The report on income tax information would be published in a common template, available for free in an open data format and made accessible to the public on the company's website on the date of its publication in at least one of the EU's official languages. On the same date, the company must also file the report in a public registry managed by the Commission.
  • Companies established only in the territory of a single member state and in no other tax jurisdiction are exempted from the application of those rules.
  • The information shall be presented in the common template and comprise the following, broken down by tax jurisdiction:
  • the name of the ultimate parent company and, where applicable, the list of all its subsidiaries, a brief description of the nature of their activities and their respective geographical location;
  • the number of employees on a full-time equivalent basis;
  • fixed assets other than cash or cash equivalents;
  • the amount of the net turnover, including a distinction between the turnover made with related parties and the turnover made with unrelated parties;
  • stated capital;
  • details of public subsidies received and any donations made to politicians, political organisations or political foundations; and
  • whether companies, subsidiaries or branches benefit from a preferential tax treatment from a patent box or equivalent regimes.
  • Where a member state comprises several tax jurisdictions, the information shall be presented separately for each tax jurisdiction, including each tax jurisdiction outside the EU.
  • ["Safeguard clause" dubbed "temporary omissions" by MEPs] In order to protect commercially sensitive information and to ensure fair competition, member states may allow for one or more of the specific items of information listed above to be temporarily omitted from the report as regards to activities in one or more specific tax jurisdictions when they are of a nature such that their disclosure would be seriously prejudicial to the commercial position of the companies. NB: "Member states shall make such omissions subject to prior authorisation of the national competent authority. The undertaking shall seek each year a new authorisation from the competent authority, which will take a decision on the basis of a new assessment of the situation. Where the information omitted no longer complies with the requirement laid down in subparagraph 3a, it shall immediately be made publicly available. As from the end of the non-disclosure period, the undertaking shall also retroactively disclose, in the form of an arithmetic average, the information required under this Article for the preceding years covered by the non-disclosure period. […] Members states shall notify the Commission of the granting of such a temporary derogation and shall transmit to it, in a confidential manner, the omitted information together with a detailed explanation for the derogation granted. Every year, the Commission shall publish on its website the notifications received from member states and the explanations provided in accordance with subparagraph 3a."

The adopted legislative resolution by the European Parliament does not mean that the EU has now adopted public CbCR already. This resolution is only Parliament's formal negotiating mandate or common position for entering into so-called 'trilogue' negotiations (between representatives of the EU's Parliament, Council and Commission) for a final compromise text.

The Commission's draft is still being discussed in Council by the EU 28 member states at technical level. No real progress is expected in the EU Council at the political level before a new German federal government is in place. It is not known at this stage when or even whether trilogue discussions will commence this autumn.

Bob van der Made (
PwC EU Public Affairs-Brussels (Tax, State aid)
Tel: +31 6 130 96 296

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