Public Country-by-Country Reporting for Multinationals Commencing Imminently

For 2025, certain multinationals must publish financial, tax and business information online, on a country-by-country basis.  The information must be published within 12 months of the financial year end.  Given the first financial years in respect of which the obligations apply are, in most cases, already underway, it is important for in-scope multinationals to ensure that they are fully prepared.

Background

As discussed in previous Matheson publications, on 22 June 2023, Ireland introduced the European Union (Disclosure of Income Tax Information by Certain Undertakings and Branches) Regulations 2023 (the "Regulations") which transposed the EU Directive on public country-by-country (“Public CbC”) reporting, Directive (EU) 2021/2101 (“EU Directive”).  The Regulations require public reporting of financial and tax information of certain multinational enterprises (“MNEs”) and standalone entities. 

The Regulations came into effect for financial years beginning on or after 22 June 2024.  Therefore, for in-scope entities with a 31 December financial year-end, information must be disclosed in relation to the financial year that commenced on 1 January 2025.

When does an entity fall within the scope of the Regulations?

Entities governed by Irish law come within the scope of the Regulations if they are:

• the ultimate parent entity of a large MNE, or a standalone entity, with consolidated revenues exceeding €750 million for the last two consecutive financial years;
• a large or medium sized subsidiary of a non-EU based ultimate parent entity where the consolidated revenue of the group exceeds the €750 million threshold (the EU Directive stipulates when an entity qualifies as a ‘large’ or ‘medium-sized’ subsidiary)[1]; or 
• an Irish branch of a non-EU MNE that has a net turnover above €12 million for the last two consecutive financial years.

What information must be filed publicly?

The Public CbC report must include information related to all activities of the reporting entity and, where applicable, affiliated entities consolidated in the financial statements of the reporting entity.  The following information must be included in the Public CbC report:

• name of the standalone entity or the ultimate parent undertaking entity;
• financial year and currency in respect of which the report has been prepared;
• a list of all subsidiaries in the consolidated group which are based in the EU or in an EU blacklisted[2] or greylisted jurisdiction[3];
• a brief description on the nature of the activities of the undertaking;
• details of net turnover, other operating income and income from any other investments;
• details as to the amount of profit or loss before income tax;
• details as to the amount of income tax accrued during the financial year to which the Public CbC report relates; 
• details as to the amount of income tax paid on a cash basis during the financial year to which the Public CbC report relates;
• details as to the amount of undistributed profits from the current and prior financial years of the undertaking or, in the case of a branch, the undertaking that established the branch; and
• number of full-time employees or employees who are employed on an equivalent basis.
  

Where the subsidiary or the branch does not have all the required information available, it must request these details from its parent undertaking.  If the parent undertaking does not provide the requested information, the subsidiary or branch must prepare the Public CbC report with the information available to it and include a statement in the report that the parent undertaking did not provide the requested information.

Many MNEs will have focused recently on the information included in their (private) CbC reports where they are relying on the transitional CbC reporting safe harbours from the OECD’s Pillar Two rules.  The information that must be reported publicly under the Regulations mirrors these requirements and so this information will be familiar to many internal teams.

Are there any carve outs?

The Regulations provide for a five-year deferral from reporting for information which if published would “seriously prejudice the undertaking’s competitive position”.  In such a scenario, the omitted information must be published five years after the date of its initial omission.  This deferral is not applicable to information in respect of jurisdictions included on the EU blacklist or greylist.

Where this deferral treatment is applied, the Public CbC report must provide a reasoned explanation of why disclosure of the information would seriously prejudice the undertaking’s competitive position.

When and how is this information published?

The Public CbC report, or a link to the report, must be published on the website of the reporting entity in English or Irish, free of charge and for a continuous period of no less than five years from the date of publication.

The Public CbC report must be published within 12 months after the financial year-end date.  Therefore, entities with a financial year-end of 31 December 2025 must publish their Public CbC report by 31 December 2026.  

Who is responsible for publishing the Public CbC report

The management and supervisory body (including directors, partners and authorised persons) of the reporting entity are responsible for ensuring the preparation and publication of the Public CbC report.  Penalties for non-compliance with the Regulations includes fines of up to €5,000 or a term of imprisonment of up to six months.

What are the next steps?

With the financial year for the first Public CbC obligations already underway for most in-scope entities it is essential that companies are prepared for these public filing obligations.  The Matheson team is happy to assist with any questions that may arise in advance of the first filing dates.