The new articles prescribe the instances in which a company, or a group of companies, is obliged to draw up, publish and make accessible to the public, free of charge and in an electronic reporting format, a CBCR report on income tax information. Companies or groups of companies falling within one of the following categories are captured by these Rules:

1. Ultimate parent entities where the consolidated revenue on their balance sheet date exceeded €750 million for each of the last two consecutive financial years;
2. Standalone undertakings where the revenue on their balance sheet date exceeded €750 million for each of the last two consecutive financial years;
3. Medium-sized and large subsidiary undertakings controlled by an ultimate parent undertaking that is not governed by the law of a Member State or an EEA state, where the consolidated revenue on its balance sheet date exceeded €750 million for each of the last two consecutive financial years;
4. Branches opened in Malta by undertakings that are not governed by the law of a Member State or an EEA state, where the net turnover of the branch exceeded €750 million for each of the last two consecutive financial years. 

The provisions in relation to the requirement of a public CBCR would not be applicable to standalone undertakings or Ultimate Parent Entities (including their branches) if these are established in a single Member State or EEA State.  In addition, points (3) and (4) above do not apply if the UPE or standalone undertaking is not governed by the law of a Member State or EEA state draw up a report on income tax information as prescribed in the Rules.


A collective responsibility is assumed amongst the Directors in ensuring that the obligations are adhered to. Moreover, where the financial statements of an undertaking are required to be audited, the audit report should state whether the undertaking was required to publish a CBCR and if yes, whether such was published in accordance with the legislation.


A new part to the Fourth Schedule of the Companies Act has been added prescribing the manner in which the report in question is to be drawn up. As per this Schedule, the Report must contain, separately for each Member State or EEA state:

• General information on the entities involved:
  • Name of the ultimate parent undertaking or standalone undertaking
  • Financial year concerned 
  • Currency used for the presentation of the report, being the ultimate parent undertaking’s presentational currency.
  • List of all subsidiary undertakings consolidated in the financial statements of the ultimate parent undertaking 
• Description of the nature of their activities
• Number of employees on a full-time equivalent basis;
• Revenues, excluding dividend income received from affiliated undertakings; 
• Amount of profit or loss before income tax; 
• Amount of income tax accrued, excluding deferred taxes and provisions for uncertain tax liabilities;
• Amount of income tax paid on a cash basis; 
• Amount of accumulated earnings at the end of the relevant financial year;

Information shall be attributable to each relevant tax jurisdiction on the basis of the undertaking’s establishment, fixed place of business or permanent business activity. The changes bring the requirement for a CBCR to be published on the UPE or the standalone undertaking’s website, in at least one of the official languages of the Union, within 12 months of the balance sheet date of the financial year in question. Such undertakings would be required to deliver the CBCR to the Registrar for registration within 14 days from such publication.
 

The mandatory public CBCR is expected to pose an additional administrative burden on all impacted multinational companies, however, from an MNE stakeholder’s point of view, such public disclosure will enhance public scrutiny of income taxes paid by multinationals operating within the European Union, increasing transparency and reliability of public information. 

Want to know more? Get in touch with our tax team 

Get in touch