Directive (EU) 2021/2101 amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches

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Series Details L 429, Pages 1-14
Publication Date 01/12/2021
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Directive (EU) 2021/2101 - signed by the co-legislators on 24 November 2021 - introducing amendments to Directive 2013/34/EU relating to the relating to the disclosure of income tax information by multinational enterprises. It is commonly known as the public Country-By-Country Reporting (CBCR) Directive. This is a text with EEA relevance.

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Directive 2013/34/EU - also known as the Accounting Directive - aims to ensure the clarity and comparability of financial statements, other than international financial reporting standards (IFRS). It aims to limit administrative burdens and provide for simple and robust accounting rules. It also aims to increase transparency of the payments made by the mining and logging industries to governments.

The draft law was tabled by the European Commission on 12 April 2016 as part of its Action Plan on a Fairer Corporate Tax System. The aim was to introduce public reporting requirements for the largest companies operating in the European Union (EU). The draft law required enterprises with global revenues exceeding €750 million a year to public key information on where they make their profits and where they pay their tax in the EU on a country-by-country basis (CBCR). The same rules would apply to non-European multinationals doing business across the EU. In addition, companies would have to publish an aggregate figure for total taxes paid outside the European Union.

This initiative was a result of a consultation conducted by the Commission on public reporting and further tax transparency in 2015, and it was closely linked to the revision of the so-called Administrative Cooperation Directive. The European Parliament adopted a mandate for negotiations on 4 July 2017, and a first-reading position on 27 March 2019. Despite a number of discussions on the matter, the Council of the European Union took a number of years to adopt a negotiating approach on this file. Member State representatives eventually adopted a negotiating mandate on 3 March 2021. An informal agreement between the co-legislators on a compromise text for the draft law was reached on 1 June. This was formally endorsed by the Council on 28 September and by the Parliament on 11 November. The Act was published in the Official Journal on 1 December 2021.

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Commentary and Analysis
The Conversation, 13/04/2016: The new tax laws planned in wake of Panama Papers – and the crucial role of public opinion
Euro|topics, April 2016: EU Commission reacts to Panama Papers
EPRS: Briefing, July 2016: Publishing corporate tax information Country-by-country reporting for multinational enterprise groups [Initial Appraisal of a European Commission Impact Assessment]
EY: Global Tax Alert, 07/07/2017: European Parliament votes in favor of public Country-by-Country reporting in first reading
Deloitte: Insights, August 2017: An Update on Public Country by Country Reporting (CbCR)
International Tax Review, 24/08/2018: European Union: Public country-by-country reporting in the EU off the tracks, for now
Global Alliance for Tax Justice: Letter, 31/10/2018: Lack of progress of EU negotiations on European Commission’s proposal for public country by country reporting
EPRS: Briefing, April 2019: Public country-by-country reporting by multinational enterprises
OKFN Blog, 13/05/2019: Two years on, little action from the EU on public country-by-country reporting
EUObserver, 08/02/2021: Portugal vs Germany clash on EU corporate tax avoidance
Ernst&Young: Tax Alerts, 26/02/2021: EU negotiations on public CbCR move forward as majority of Member States back proposal
KPMG: Insights, 26/02/2021: Ministers discuss public Country-by-Country Reporting proposal
CSR Europe: News, 23/03/2021: Greater Corporate Tax Transparency with the Country-By-Country Reporting Directive
Social Europe, 05/05/2021: Pay your taxes where your profit is
Eurodad: Press Release, 01/06/2021: EU fails to introduce real public country by country reporting
ICIJ: Paradise Papers, 02/06/2021: EU tax transparency rules leave tax justice advocates craving more ambitious reforms
Ernst&Young, 09/06/2021: EU co-legislators reach agreement on public CbCR
PwC: Tax Policy Bulletin, 22/06/2021: EU Parliament and Member States agree on public country-by-country reporting
KPMG: EU Tax Centre, August 2021: CBCR overview. An EU perspective on country-by-country reporting
Ernst&Young, 28/09/2021: EU Member States adopt public CbCR Directive
Deloitte: Blog, 01/10/2021: EU public Country-by-Country Reporting: Next hurdle taken and final approval expected in November
Eurodad: Press Release, 11/11/2021: Missed Opportunity: EU Parliament rubber stamps Directive that promises tax transparency, but fails to deliver

Politico, 12/04/2016: Commission announces tax transparency rules for multinationals
BBC News, 12/04/2016: EU seeks more tax details from big firms
EurActiv, 12/04/2016: EU’s new tax haven blacklist doomed to failure, warn campaigners
EUObserver, 12/04/2016: EU commission wants tax haven blacklist
EUObserver, 12/04/2016: EU to toughen corporate tax disclosures
The Guardian, 26/02/2021: EU states back plan to expose big companies' tax avoidance
EurActiv, 26/02/2021: Portugal wins EU support for corporate tax transparency law
Malta Today, 04/03/2021: MEPs get ready to lock horns in Council talks on tax disclosure for multinationals
The Irish Times, 01/06/2021: EU reaches deal to force multinationals to report profits by country
Bloomberg, 01/06/2021: EU to Force Multinationals to Report Revenue in Each Country
RTÉ News, 01/06/2021: EU agrees rules for corporate tax transparency
Reuters, 02/06/2021: EU reaches deal on tax transparency for multinational firms
Deutsche Welle, 02/06/2021: EU agrees to new tax transparency rules for multinationals
The Guardian, 02/06/2021: EU agrees to force multinationals to disclose tax, piling pressure on UK
Delano, 29/09/2021: EU edges towards corporate transparency, Luxembourg abstains

EUR-LEX: COM(2016)198: Proposal for a Directive amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches (CBCR)
EUR-Lex: SWD(2016)117: Staff Working Document accompanying the Proposal - Impact assessment
EUR-Lex: SWD(2016)118: Staff Working Document accompanying the Proposal - Executive summary of the impact assessment
European Parliament: Legislative Observatory: Procedure File for Proposal on Disclosure of income tax information by certain undertakings and branches (2016/0107(COD))
European Parliament: Legislative Train Schedule: Proposal on disclosure of income tax information by certain undertakings and branches - public country-by-country reporting
European Commission: Public country-by-country reporting
European Commission: Press Release, 12/04/2016: European Commission proposes public tax transparency rules for multinationals
European Commission: Fact Sheet, 12/04/2016: Introducing public country-by-country reporting for multinational enterprises - Questions & Answers
European Commission: Remarks by Commissioner Jonathan Hill on tax transparency rules for multinationals, 12 April 2016
European Parliament: Press Release, 04/07/2017: Multinationals should disclose tax information in each country they operate
European Parliament: Legislative Observatory: Resolution on the state of play on the proposal for a directive of the European Parliament and of the Council amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches (2016/0107(COD)), known as public country-by-country reporting
European Parliament: Press Release, 24/10/2019: Get multinationals to disclose where they pay taxes, MEPs tell member states
Party of European Socialists: News, 24/02/2021: PES ministers urge EU to take a step forward on combating tax evasion and fraud, call for corporate tax transparency
Portuguese Council Presidency: News, 26/02/2021: Have you heard of CBCR?
Council of the European Union: Press Release, 03/03/2021: Council approves greater corporate transparency for big multinationals
European Parliament: Press Release, 04/03/2021: Delay is over: Work begins to shine spotlight on where companies pay their taxes
Council of the European Union: Press Release, 01/06/2021: Public country-by-country reporting by big multinationals: EU co-legislators reach political agreement
European Parliament: Press Release, 01/06/2021: EU lawmakers strike milestone deal for corporate tax transparency
Portuguese Council Presidency: News, 02/06/2021: Agreement reached on greater tax transparency for multinationals in the EU
GUE/NGL: News, 02/06/2021: Corporate tax transparency deal opens door for shifting practices to tax havens
Council of the European Union: Press Release, 28/09/2021: Public country-by-country reporting: Council paves the way for greater corporate transparency for big multinationals
S&D EP Group: Newsroom, 10/11/2021: Under S&D leadership, European Parliament to adopt pioneering financial transparency rules
European Parliament: Press Release, 11/11/2021: Corporate tax transparency: MEPs okay new country-by-country reporting rules

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