Introduction

In December 2021, the EU public Country-by-Country Reporting (“CbCR”) Directive entered into force. This Directive requires multinational groups with a total consolidated revenue of at least €750 million and with a certain presence in the EU, to publicly disclose specific information related to the corporate income tax they pay in each EU member state and certain other jurisdictions. At this time, the Netherlands has published draft legislation to implement the directive that is expected to enter into effect for financial years starting on or after 22 June 2024.

Companies in scope

Multinationals falling within one of the following two categories will be subject to the public CbCR:

1. Multinationals that have their ultimate parent entity in the EU and have a total consolidated revenue of more than 750 million euros over the last two consecutive financial years; or
2. Multinationals that do not have their ultimate parent entity in the EU, must have a total consolidated revenue of more than 750 million euros over the last two fiscal years, and have control over a medium-sized or large subsidiary or qualified branch in the EU.

The above does not apply to certain financial institutions as they are already required to publish a CbCR on the basis of earlier rules.

What must be reported?

The EU’s public CbCR is based on the already existing CbCR introduced by the OECD and implemented by the EU member states in 2016. The information to be disclosed under Public CbCR must be split per EU member state, but also in relation to subsidiaries of the multinational in jurisdictions that are included on either of the annexes of the EU’s list of non-cooperative jurisdictions. Additionally, for all other countries, aggregated data must be disclosed.

Member states can allow one or more specific data items to be omitted if disclosing the information would seriously harm the commercial position of the company. The Dutch parliamentary papers for the Directive's implementation into Dutch law indicate the Netherlands aims to implement this option. However, information that is omitted must be disclosed in a later report, at the latest within five years from the date of the report the information was omitted from. This exemption cannot apply to information on countries on the EU black or grey lists. We refer to Annex 1 for a full list of information to be disclosed under the current Dutch legislative proposal in comparison to the CbCR information list.

Information must be made publicly available on a company’s website

To ensure transparency and accountability, the information must be published by companies in a specific format that is yet to be determined. The information should be made available for free on the company’s website. Moreover, this information must be published within twelve months from the end of the book year and must remain accessible for at least five years.

Reporting by management and review by the independent auditor

In the Netherlands, the reporting will become part of a company’s management report. The management report, together with the annual accounts, are reviewed by an independent auditor. The auditor must also review the previous year’s public CbCR and include it in its statement. This includes the obligation to publish the information on the company’s website.

In the Netherlands, the reporting will become part of a company’s management report. The management report, together with the annual accounts, are reviewed by an independent auditor. The auditor must also review the previous year’s public CbCR and include it in its statement. This includes the obligation to publish the information on the company’s website.

Annex 1 Information to be disclosed in the Netherlands under (public) CbCR