On 1 August 2024, the European Commission released a draft regulation to standardize multinational enterprises (“MNEs”) income tax information for public Country-by-Country Reporting (“CbCR”), as required by Directive 2013/34/EU. The proposal introduces a common template and electronic formats to improve clarity and comparability of tax disclosures across the jurisdictions.
Key Highlights
Unified reporting template
A standardized format will be introduced to ensure that MNEs report tax information consistently across the EU, making it easier to compare data between jurisdictions.
Digital reporting formats
The regulation emphasizes the use of Extensible Hypertext Markup Language (XHTML) and Inline Extensible Business Reporting Language (Inline XBRL), enhancing both human-readable and machine-readable formats, ensuring precise and accessible reporting.
Scope of reportable data
The annexes detail the scope and structure of the data that must be reported, ensuring clarity about what needs to be disclosed for each financial year.
The adoption of the draft regulation is planned for third quarter 2024 with effect from 1 January 2025 and applicable to financial years starting on or after that date.
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