New Public Country-by-Country Reporting Obligations

 New Public Country-by-Country Reporting (Public CbCR) Obligations

Law 28/2022 has transposed Directive (EU) 2021/2101 into Spanish law, introducing an obligation for certain multinational groups and entities in Spain to prepare and publish a Public Country-by-Country Report (Public CbCR) on corporate income tax. This measure strengthens tax transparency within the European Union, primarily affecting groups with a consolidated turnover exceeding 750 million euros. The report must include key information on the group’s activity and taxation by jurisdiction, and it must be made public within six months of the end of the fiscal year. The 2025 fiscal year will be the first year in which many companies will be subject to this obligation. 

1. Context and Regulatory Framework 

Tax transparency among large multinationals has become a strategic priority for the European Union. In this regard, Law 28/2022, of 21 December (also known as the Startup Law), transposed EU Directive 2021/2101 into Spanish regulations and, specifically, amended Law 22/2015, of 20 July, on the Audit of Accounts (LCAC). This rule modifies Directive 2013/34/EU and implements the obligation for certain companies and branches to prepare and publish an annual corporate income tax report, commonly referred to as the Public Country-by-Country Report (Public CbCR), which is distinct from the Country-by-Country report provided for in tax regulations. 

1.1 Which entities are in scope? 

Companies or groups with a consolidated turnover exceeding EUR 750 million in each of the last two consecutive fiscal years are required to report. This specifically affects: 

• Ultimate Parent Entities (UPE) subject to Spanish law. 

• Subsidiaries (medium and large) and branches in Spain belonging to groups whose ultimate parent company is not governed by the law of an EU Member State. 

• Exception to Public Country-by-Country Reporting Obligations: Subsidiaries and branches of UPEs not subject to EU law are exempt provided that the following criteria are met: 1) The CbCR has already been prepared by the UPE or an independent entity; 2) the content is compatible with Spanish requirements; 3) it is made accessible to the public free of charge; 4) it is published on the company’s website; 5) it its published in one of the official languages of the EU; and 6) publication occurs within a maximum of 6 months from the fiscal year-end. Given that the deadline for the Public Country-by-Country Report under Spanish regulations is 6 months, complying with this last requirement may pose a practical difficulty. 

2. Report Content and Format 

The report must provide a breakdown of key information for each EU Member State and for jurisdictions included in the EU “black” or “grey” lists. The data to be disclosed includes: 

• The group’s structure and activities 

• Number of employees 

• Revenue and profit/loss before tax 

• Corporate income tax accrued and paid 

• Accumulated reserves 

In accordance with the EU Implementing Regulation 2024/2952, the report must follow a common template and be presented in machine-readable electronic formats to guarantee comparability across the EU. 

Unlike the tax-specific Country-by-Country Report (Form 231 or “Country-by-Country”), the Public Country-by-Country Report provided for in the Law on the Audit of Accounts is a public document. 

3. Deadlines and Publication in Spain 

• Approval and Publication. the reporting entity must approve and publish the report within six months of the fiscal year-end. 

• Accessibility. The report must be available free of charge on the company’s website and filed with the Commercial Registry along with the annual accounts. 

• First Fiscal Year. Companies meeting the criteria in 2024 and 2025 must publish their first report corresponding to the 2025 fiscal year during the first half of 2026. 

4. Considerations for Groups with a Foreign Parent Company 

It is important to note that, if the ultimate parent entity is resident in another country (e.g., Italy), the preparation and deadlines for the report will primarily be governed by that country’s regulations, provided it has transposed the Directive. However, Spanish subsidiaries must ensure that the information is accessible and complies with local filing requirements. 

At Bové Montero, we are at your disposal to analyse how these new regulations affect your group and to assist you in the preparation and fulfilment of these transparency obligations.