MNEs required to publish tax info on their websites as of 2018 – Dutch update

Publication July 2016


On 12 April 2016, the European Commission adopted a proposal for a Directive which imposes on EU and non-EU multinational groups (MNEs) the obligation to publish a yearly report on the profit and tax paid and other information. This proposal requires that MNEs, whether headquartered in the EU or outside, with turnover of more than € 750m disclose on their website the corporate income tax they pay together with other relevant tax-related information (the CBCR). Additional special transparency requirements apply to MNEs that are active in black listed jurisdictions. It is expected that this new reporting obligation will apply to MNEs active in Europe as of the financial year 2018.


The EU has already created a framework where businesses in the extractive and logging industries have to publish their payments to governments relating to the exploitation of natural resources and a country-by-country reporting is required from EU credit institutions (banks). These two measures will be expanded with the public country-by-country reporting for MNEs that draft of which was published in April of this year.

The Commission aims with this proposal to satisfy our societies’ call for fairness and tax transparency. Enhanced public scrutiny of corporate income taxes borne by multinational undertakings carrying out activities in the European Union is an essential element to further foster corporate responsibility, to contribute to the welfare through taxes, to promote fairer tax competition within the Union through a better informed public debate and to restore public trust in the fairness of the national tax systems.

Scope – very large MNE groups

MNEs having a consolidated net turnover exceeding € 750,000,000 will be required to prepare the CBCR. This is the same threshold as that set out in the OECD/BEPS and in the ATAP. In light of the specific objectives of public tax transparency, and going further in some respects than the rules currently applicable in the sectors of banks and extractive industries, the threshold of EUR 750 million will be calculated on a worldwide basis, and MNE groups are required to submit information on their worldwide activities.

The proposal does not only target European MNEs. For any MNE headquartered in a third country, the obligation will fall on its subsidiaries or branches in the EU. This is only different if the non-EU MNE makes the CBCR publicly accessible and indicates which subsidiary or branch in the EU is responsible for the publication of the CBCR on behalf of the “parent” company.

Banking groups exempted

Banking groups established in the EU are already required to publish a CBCR under Article 89 of Directive 2013/36/EU of the European Parliament and of the Council. Where these are MNEs which fall within the scope of this initiative, they will be exempted from the obligation to report on tax information, provided that the report disclosed under Article 89 of Directive 2013/36/EU encompasses the activities of the ultimate parent undertaking in the EU and of all of its affiliated undertakings .

CBCR Content

A CBCR should only have to contain information that is necessary and sufficient to meet the stated objectives of this initiative. This includes:

  • the nature of the activities;
  • the number of persons employed;
  • the net turnover made (including with related parties);
  • the profit made before tax;
  • the amount of corporate income tax due in the country as a reason of the profit made in the current year;
  • the actual payments made to the country's tax authorities during that year, and
  • the amount of accumulated earnings.

The CBCR should also include an overall narrative providing explanations in case of material discrepancies at group level between the amounts of taxes accrued and the amounts of taxes paid, taking into account corresponding amounts concerning previous financial years.

The information should be broken down by Member State in order to ensure a level of detail that will enable citizens to better assess how MNEs contribute to welfare in each Member State. This means that where more than one entity of a group is involved in a given country, the CBCR will present the sum of the information relating to each entity in that country.

The same information on the activities of the group in other tax jurisdictions can generally be provided on an aggregated basis (expect for black listed jurisdiction – see below).

Black listed jurisdictions

Please note, however, that the information on operations of MNEs in third countries that refuse to respect good governance standards in taxation and pose specific tax challenges should also be shown with a high level of detail. Hereto, the EU has undertaken to draw up a common list of certain tax jurisdiction on this basis in line with the Commission Communication of 28 January 2016, which specified the proposed approach and the criteria to draw up such a list.1


The CBCR will be published in a business register with the objective of ensuring certainty and availability over time. Moreover, as the objective of this initiative is to enable public scrutiny, those reports will also be made accessible to the public on company websites. To allow for comparisons over time, reports will remain accessible for at least five consecutive years on the websites.


The proposal contains a reference that it should be implemented by all Member States one year after its entry into force. If the Directive will be agreed this year, it should be implemented by the end of 2017. It is expected that this new reporting obligation will apply to MNEs active in Europe as of the financial year 2018.

Comments from the Dutch Government

On 1 July 2016, the Dutch Secretary of Finance answered certain questions of the Senate on the CBCR proposal. He mentioned, amongst others, that:

  • The aim of the public Country by Country Reporting is to show the public how much corporate income tax a multinational really pays and where it pays this tax. The requirement focusses corporate income tax because multinationals can reduce their effective tax rate by arbitrage between different domestic corporate income tax provisions.
  • There is less tax planning by multinationals around other taxes and therefore there is little added benefit to exchange or publish information on those taxes. (…) Including multiple taxes within the EU would result in an aggregated amount that makes drawing any conclusions difficult. Such setup would not be suitable for public discussions.
  • Concerning the execution, the Dutch government agrees with the member of the “CDA” Party that it should take account of efficiency and effectiveness of the execution. For that reason, the government will pursue a proposal that uses financial information already available to the multinational in order to prevent additional work.

Unfortunately, the Secretary of Finance did not make any comment about the date of the expected entry into force.

Our take

The OECD proposed greater tax transparency in BEPS Action 13 by obliging qualifying MNEs to share tax information with tax authorities through a Country-by-Country report. The Commission now goes several step further by obliging MNEs to make (part of that) tax information available on their websites in order to allow for public scrutiny. It seems the Commission found this public scrutiny strategy effective in state aid cases. However, this proposal puts more pressure on the financial and tax reporting units of MNEs and their auditors to produce and verify a CBCR. This holds especially true for MNEs in the extractive industry that now have to comply with two public reporting requirements.



As set out in that Communication, the common EU list will be based on clear and internationally justifiable criteria, based on internationally-agreed standards as set out in the Directive and a robust screening process. The list will be developed by the Commission and Member States. The Commission proposes that a final decision on the tax jurisdictions to be included in the common EU list would be made in a Delegated Act allowing a role for both Council and Parliament.

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