World news
27 May 2021

The public Country-by-Country Reporting is being discussed at the EU level

Country-by-Country Reporting (CbCR) is part of the 15-point Action Plan BEPS, which aims to find a solution against aggressive tax planning and ensure that tax is paid where profits and value are actually generated. CbCR was introduced into the Slovak legislation through an amendment to Act no. 442/2012 Coll. on International Assistance and Cooperation in Tax Administration effective from 1 March 2017.

Marianna Dávidová
Daniel Vavro

The CbCR contributes to the overall picture of the group's activities and includes, among the other, information about the amount of tax paid, the value of assets, revenues, profit or loss before tax, the number of employees in each country. However, this data is currently available only to the tax administration and is not yet being published.

Already in April 2016, the European Commission proposed to amend Directive 2013/34/EU of the European Parliament and of the Council. The proposal went beyond the BEPS standards and required large multinational enterprises (MNE) to publish several financial data on their websites, including income tax paid per country. The proposal has remained in deadlock since then, mainly due to disagreements on its legal basis. The significant shift forward to the introduction of public Country-by-Country Reporting (pCbCR) did not take place until 25 February 2021, during a political debate between Member States of the European Union organized by the Competitiveness Council configuration (COMPET).

Despite the negative attitude of some Member States, the COMPET approved the pCbCR legislative proposal, which would require MNEs with global revenues above a certain level to disclose key financial information, including the amount of income tax paid per country.


Based on the COMPET voting system, the qualified majority is obtained when at least 15 (55%) Member States representing at least 65% of the European Union's population agree to the proposal. It is the voting system that provokes negative reactions from the Member States, as the tax issues in general fall within the remit of ECOFIN and unanimity is required for approval. At present, eight Member States do not agree with the proposal and two countries (Slovakia and Lithuania) have not commented on the proposal.

The proposal will move forward to the negotiation phase between the European Parliament and the European Council, while the expected aim of reaching an agreement on the directive is before the end of the Portuguese Presidency (30 June 2021). If the directive is approved, Member States will have two years to incorporate it into local law.

Although the future of the pCbCR is still uncertain, broad support from Member States during the COMPET meeting should be seen as a significant step forward. Public transparency in the field of taxation is also an important part of the corporate social responsibility of MNEs, that should be adequately prepared for the possible pCbCR introduction.


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