Fiscal transparency is increasingly high on the European policy agenda. In December 2021, EU Directive 2021/2101 was approved, introducing public Country-by-Country reporting (EU Public CbCR). As a result, large multinational enterprises are faced with a new obligation.
They will have to make key data on their activities, profits and tax position publicly available per country. This aims to provide greater transparency on where profits are generated and corporate income tax is paid, both within and outside the EU.
On 26 January 2024, Belgium announced the implementation of EU Public CbCR in the Belgian Official Gazette. The new rules are included in the Code of Companies and Associations (CCA) and apply to financial years starting on or after 22 June 2024.
For most Belgian companies, this means that the new requirements apply to the financial year starting on 1 January 2025. The public CbC report must be published no later than 12 months after the end of the financial year (for most Belgian companies, therefore no later than 31 December 2026).
Scope
The obligation to comply with EU Public CbCR applies to multinational enterprises that:
- have achieved consolidated revenue of more than EUR 750 million in each of the last two completed financial years; and
- have their ultimate parent company in the EU; or
- are established outside the EU but have at least one qualifying medium-sized or large EU subsidiary or a qualifying EU branch.
The thresholds in the EU Directive to determine whether a subsidiary or branch qualifies are as follows:
- Subsidiaries qualify if, during the financial year, at least two of the following three criteria are met:
o EUR 5 million balance sheet total
o EUR 10 million net turnover
o an average workforce of 50 employees - For branches, only net turnover is considered, which must be achieved in each of the last two consecutive financial years.
However, Member States may apply higher thresholds (within the limits of the EU Directive) to determine whether a subsidiary or branch qualifies as medium-sized or large. The assessment must therefore be carried out per country.
In Belgium, the following thresholds apply:
- Subsidiaries qualify if, during the financial year, at least two of the following three criteria are exceeded:
o EUR 6 million balance sheet total
o EUR 11.25 million net turnover
o an average workforce of 50 employees - Branches qualify if they achieve a total turnover of at least EUR 9 million in each of the last two consecutive financial years.
Reporting responsibility
For groups established in the EU, the ultimate parent company must prepare and publish the report in its Member State.
For non-EU groups, the ultimate parent company may publish the report on its own website. In addition, one qualifying EU subsidiary or one qualifying EU branch must file the report with the national commercial register.
It is essential that groups determine in time which entity will take on the reporting obligation and align internal processes accordingly.
Content of the public CbC report
For each relevant jurisdiction, the following information must be disclosed:
- brief description of the business activities
- number of employees in full-time equivalents
- revenue generated (including revenue from transactions with related parties)
- profit or loss before tax
- income tax accrued for the current financial year
- income tax paid
- accumulated earnings
This information must be reported:
- separately for each EU Member State
- separately for each jurisdiction listed on the EU list of non-cooperative jurisdictions or on the so-called “grey list” (if listed for two consecutive years)
- on an aggregated basis for all other jurisdictions
Belgium additionally requires separate reporting per jurisdiction for:
- jurisdictions identified by the Global Forum on Transparency and Exchange of Information in Tax Matters as non-compliant or not substantially compliant with the standard for exchange of information on request (for example Montenegro and Egypt)
- jurisdictions officially designated by Belgium as tax havens or as states with no or low taxation, as included in Article 179 and Article 73/4quater of the Royal Decree implementing the Income Tax Code
Publication requirements and reporting format
The public CbC report must be made available free of charge, typically via the company’s website and a national commercial register.
In Belgium, disclosure is in principle done via publication on the company’s website and by electronic filing with the National Bank of Belgium. However, a company is exempt from publication on its website if the report is made available free of charge via the National Bank of Belgium.
The report must be published in a standardized XHTML format with Inline XBRL (iXBRL) and must remain available for at least five years.
How we can support
Although much of the required data is typically already available through OECD CbC reporting, public availability introduces new points of attention.
We are happy to support companies with:
- assessing whether the group falls within the scope of EU Public CbCR
- identifying the reporting entity and analyzing applicable local rules
- preparing or reviewing the content of the report
- ensuring consistency with other tax documentation
- implementing processes for iXBRL tagging and compliance with publication requirements
Given the required data collection, the technical iXBRL format, internal validation and coordination across multiple jurisdictions, it is advisable to start preparations well in advance of the first reporting deadline in 2026.
