General aspects
On 1 December 2021, the European Commission published Directive 2021/2021 in the Official Journal of the EU. The aim of this directive is to ensure the smooth functioning of the internal market through fiscal transparency.
The new rules outlined in the Directive require independent entities and multinational groups with a consolidated revenue in excess of EUR 750 million for each of the last two consecutive financial years to draw up and publish a report containing information regarding their activity, including that of all affiliated entities of the multinational group.
The information included in this report relates to:
- name of the ultimate parent company or independent entity, the financial year in question, the currency used in the report and, where applicable, a list of all subsidiary undertakings included in the financial statements of the ultimate parent company
- brief description of the nature of their activities
- number of employees
- net turnover
- profit/loss reported before income tax
- income tax accumulated
- income tax paid
- amount of accumulated earnings
The information should be broken down for each EU Member State where the group is active and also for each jurisdiction on the ‘EU list of noncooperative jurisdictions for tax purposes‘ (Appendix I) and those mentioned in the ‘State of play of the cooperation with the EU with respect to commitments taken by cooperative jurisdictions to implement tax good governance principles’ (Appendix II).
For the rest of the jurisdictions, the information may be aggregated.
The report will be published on the website of the register of companies of the EU Member State, as well as on the websites of the companies in question. The report must be accessible for at least five years. If the ultimate parent undertaking is not governed by the law of an EU Member State, the reporting will generally have to be carried out by EU subsidiaries or branches.
Timeline
The Directive entered into force on 21 December 2021.
The deadline for EU Member States to transpose the directive into national legislation is 22 June 2023.
According to the provisions of the Directive, the first reporting will be performed for the financial year starting on or after 22 June 2024.
Submission deadlines
The deadline for submitting the report is 12 months after the balance sheet date of the financial year for which the report is drawn up.
Source: DIRECTIVE (EU) 2021/2101 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 24 November 2021 amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches.
