Public CbCR Tracker – shrnutí implementace EU direktivy

Public CbCR Tracker - summary of the implementation of the EU Directive

In 2021, the EU Directive on Public Country-by-Country Reporting ("PCbCR") came into force. The Directive introduces an obligation to compile and disclose selected financial information about multinational groups of companies that meet certain criteria and their consolidated revenues exceed EUR 750 million in the last two consecutive years. The PCbCR was implemented into Czech legislation by an amendment to the Accounting Act, which was adopted as part of the so-called consolidation package earlier this year. In the terminology of the amendment to the Accounting Act, PCbCR is an obligation to prepare and disclose a so-called income tax report.

Multinational groups that qualify for the PCbCR will be required to publish an income tax report which will include the following information (on a country-by-country basis):

• the name of the ultimate parent,
• the period covered by the report,
• the currency used in the income tax report,
• a list of all subsidiaries,
• a brief description of the nature of the group's activities,
• the number of full-time equivalent employees,
• total revenue,
• profit before tax,
• the amount of income tax expense payable,
• the amount of income tax paid (including amounts of withholding tax paid on their income); and
• accumulated earnings.

Multinational groups will be obliged prepare and publish an income tax report for periods starting from 22 June 2024 (and earlier in some countries). The group is then required to publish its income tax report within 12 months after the end of the respective financial year. A breach of the obligation to prepare and publish the income tax report may result in a penalty (under Czech legislation, in some cases up to 3% of total (consolidated) assets).

It is therefore advisable for the multinational groups to duly identify the entities and countries which would need to be included in the  income tax report and to prepare properly for the obligation to compile and publish the report.

In this context, EY has published a tracker which summarises basic information on the PCbCR rules and the current status of implementation of PCbCR in each country. The tracker is available for free HERE.

At the moment, a total of 21 EU countries have implemented the PCbCR in their local legislation. We will continue to monitor the development of implementation in other jurisdictions for you.

If you have any questions, please contact the author of this article or the EY advisory team you are working with.

Author:

Filip Šenfeld