Dutch public country-by-country reporting effective 22 June 2024

18/04/24

As of 22 June 2024 and in line with the EU directive, the Netherlands introduces mandatory, public country-by-country reporting for large, multinational companies. Reporting commences for financial years starting on or after 22 June 2024. The effective date is approaching rapidly and as such it is important to understand its impact on your company.

What does this mean for your organisation?

The reporting obligation is applicable to below categories of companies with a (group) revenue of at least EUR 750 million in the relevant and previous year:

The ultimate parent company that is at the top of an overall group (that meets the turnover limit);
A stand-alone company that does not belong to a group (but meets the turnover limit);
Medium-sized and large companies that are a subsidiary of a company that is not established in an EU Member State (and meets the turnover limit at that level ) and are the designated EU company to make the publication; or
Qualifying fixed establishments/branches with an independent turnover of EUR 12m that belong to a group whose ultimate parent company is located outside the EU.

If your organisation falls in one of the categories, information like corporate income tax paid, number of employees and income, would need to be publicly reported per country.

Public CbCR in the Netherlands

Country-by-country reporting was first introduced in the Netherlands in 2016, stemming from the recommendations in the OECD’s base erosion and profit shifting (BEPS) Action 13. It requires Dutch tax residents that are the ultimate parent company of a multinational group to report certain financial information (e.g. corporate tax paid, revenue, profit and employees) to the Dutch tax authorities at a country level rather than globally.

In December 2023, the Dutch Senate approved the legislation to implement the EU Public Country-by-Country Reporting Directive from 2021. The additional implementation decree was published on 1 March 2024.

In line with the directive, this new Dutch legislation requires multinational groups with a total consolidated revenue of at least EUR 750m, whether headquartered within the European Union or not, to publicly disclose a.o. the corporate income tax (and related information) they pay in each EU Member State. In addition, they are required to disclose the same information relating countries that are either on the EU list of non-cooperative jurisdictions for tax purposes (the “EU blacklist”) or listed for two consecutive years on the list of jurisdictions that do not yet comply with all international tax standards but have committed to reform (the “EU grey list”).

Reporting starts for financial years starting on or after 22 June 2024. For companies that have a financial year that is the same as the calendar year, this means that they will first report on 2025. This report would need to be publicly disclosed (on the company's website and via the trade register) on 31 December 2026 at the latest.

Global developments

In February 2024, Australian treasury published updated draft legislation for public CbCR. The update aligns the Australian proposed legislation more closely to the EU regime. The bill is expected to be implemented on 1 July 2024 and like EU Public CbCR, it will have global implications. In addition, in the US, the Financial Accounting Standards Board (FASB) unanimously approved new tax transparency measures.

In the light of these public CbCR / tax transparency developments, the Financial Accountability and Corporate Transparency (FACT) Coalition - a non-partisan alliance of more than 100 state, national and international organisations - has requested the U.S. Securities and Exchange Commission (SEC) to incorporate public CbCR in the SEC tax disclosures for certain large filers based on the standards developed by the Global Reporting Initiative (GRI). This would result in an even more widespread impact of the global public CbCR movement.