Country-by-country reporting (CbCR) is evolving from a confidential tax authority filing into a public tax transparency requirement. Under the European Union (EU) Directive 2021/2101 on public country-by-country reporting (PCbCR) and related local country implementing legislation, large multinational enterprise (MNE) groups with annual consolidated revenue exceeding 750 million euros for each of the last two consecutive financial years and a qualifying EU presence may be required to publicly disclose selected tax, financial, employee, and business activity information by jurisdiction. Australia has also introduced a separate PCbCR regime that may apply to certain large MNE groups with a qualifying Australian presence. These rules can apply to both public and private large MNE groups, including non-EU headquartered groups with qualifying EU subsidiaries or branches and/or qualifying Australian presence.
What to Know
For many in-scope MNE groups, the first public reporting cycle is approaching quickly. EU PCbCR rules generally apply for financial years beginning on or after June 22, 2024, with public CbC reports typically due within 12 months after year-end. As a result, many groups will prepare their first report for fiscal year 2025, with publication expected in 2026.
EU member states have implemented the EU Directive through local legislation, so filing thresholds, publication mechanics, filing locations, and enforcement provisions should be reviewed on a jurisdiction-by-jurisdiction basis and incorporated into a coordinated compliance road map. In addition, Australian PCbCR rules apply for financial years beginning on or after July 1, 2024, with public CbC reports generally due within 12 months after year-end. Importantly, the EU and Australian PCbCR regimes are not fully aligned, and separate scoping and compliance analyses may be required.
How to Prepare
PCbCR is not simply a matter of publishing an existing confidential CbC report. In-scope MNE groups must determine which entities trigger local publication obligations, where and how reports must be filed or published, whether group website disclosure is required, and how language, format, data aggregation, and safeguard clauses may affect the final public disclosure.
Given the public nature of the disclosure, preparation may require coordination across multiple functions, including senior leadership, tax, finance, legal, sustainability, investor relations, and communications. A technically accurate report may still invite questions if the results appear inconsistent with other public information, commercial expectations, or the group’s broader tax strategy, so additional narrative may need to be considered to provide necessary context for certain disclosed data points.
The risks of being unprepared can be significant. EU member states are required to establish effective, proportionate, and dissuasive penalties, and enforcement approaches vary by jurisdiction. Many countries have introduced penalty or enforcement mechanisms for PCbCR noncompliance. Depending on applicable local law, members of management and/or supervisory bodies may also face accountability for noncompliance. Beyond statutory penalties, incomplete, late, or insufficiently contextualized disclosures may create reputational risk, investor and media scrutiny, and increased tax authority attention.
How Forvis Mazars Can Help
Forvis Mazars can help large MNE groups plan and implement a practical, defensible PCbCR compliance approach. Our U.S. transfer pricing team, together with colleagues across the global network at Forvis Mazars, can support jurisdictional obligation mapping, data readiness, gap analysis, report preparation/review, stakeholder coordination (as needed), and narrative review. Whether your organization needs end-to-end support or targeted assistance with a specific jurisdiction, data issue, or disclosure strategy, we can help you prepare with confidence for the 2026 reporting cycle.
For more information, please reach out to a professional at Forvis Mazars.
Disclaimer: The information contained herein is for general informational purposes only and is not intended to constitute legal, accounting or tax advice.