Public Country-by-Country Reporting (pCbCR): why and how multinationals should lift the lid on their taxes
Public Country-by-Country Reporting (pCbCR) of financial and tax information by multinational enterprise is probably the hottest topic in financial reporting right now.
Driven by legislative developments in Europe and Australia, and accounting developments in the United States, the year 2026 will be a breakthrough year for pCbCR – when there will be a cascade of corporate tax transparency from thousands of businesses, based on data from 2025 and accounting preparations undertaken in 2024.
However, businesses with an ultimate parent entity outside of the EU, who have a substantial presence in Romania, need to consider their obligations much earlier – with the first pCbCR reports already starting to emerge end 2024. A similarly earlier filing date applies to Croatia also. Early reporting can also be anticipated for businesses filing in Spain, where the requirement is for pCbCR to be published within six months of the closing of the balance sheet, not the standard twelve months that is in operation across most the EU and EEA.
Institutional investors, asset managers and ratings agencies are salivating at the prospect of accessing such data for the first time and being able to form a more rounded view of company tax conduct.
The legislative and accounting developments are far from perfect, but they will raise the tax transparency bar considerably and serve as a stepping on point for those multinationals who rightly decide that they may as well go ‘all in’ and embrace full and complete pCbCR, as championed by the Fair Tax Mark.
Where mandatory pCbCR has already been introduced (e.g., in connection with large European banks and extractive industries), there is evidence of reduced use of tax havens, reduced profit shifting, increased effective tax rates and increased domestic tax revenue mobilisation.
Mandatory pCbCR would enable low- and lower middle-income countries to have access to large multinationals’ CbCR data for the first time – given the majority of these countries are currently locked out of global confidential information sharing systems.
Businesses that are Fair Tax Mark accredited are well placed to transition painlessly to a world where a step change in tax transparency is increasingly expected, if not a mandatory requirement
