The Legislative Decree No. 128/2024 , implementing European Directive 2021/2101/EU, imposes important tax transparency obligations on multinational companies with consolidated revenues exceeding 750 million euros. This decree aims to increase tax transparency and accountability by requiring large companies to publish detailed information on income taxes accrued and paid in the countries where they operate.
Reporting and Publication Obligations
The Country-by-country Reporting (CBCR) requirement requires multinational corporations to prepare a tax communication that includes tax data, to be submitted annually. Within 12 months after the close of the fiscal year, this disclosure must:
- Be filed with the Registrar of Companies by the directors.
- Be posted on the corporate website, where it will remain searchable for at least five years, thus ensuring access to key and verifiable fiscal information by stakeholders, institutions and the public.
Scope and Tax News
Article 3 of the DLgs. 128/2024 specifies that these tax transparency obligations are applicable to financial statements for fiscal years beginning on or after June 22, 2024. This legislation represents a crucial step in the European tax landscape, strengthening control and transparency over the tax policies adopted by multinationals, which are often targeted for tax optimization.
Objectives of the CBCR Directive: Transparency and Accountability
The CBCR directive, together with Legislative Decree 128/2024, is part of comprehensive reforms aimed at holding multinationals accountable for taxes paid in each country of operation. This policy of compulsory tax transparencyisintended to reduce tax evasion and avoidance, as well as to provide regulators and the public with a clear view of large companies’ contributions in different territories. This action is part of a broader European commitment to fair and regulated trade, incentivizing multinationals to contribute proportionately in the countries where they generate profits.
Compliance and Requirements for Multinationals
For multinational companies, fulfilling the new Country-by-country Reporting requirements is not only regulatory compliance but also a way to promote transparent and responsible tax management. Documentation and publication of taxes in local markets can strengthen stakeholder confidence and reduce the risk of tax disputes with local authorities. This mandatory compliance is therefore a strategic lever for multinationals operating in Europe, ensuring a position in line with international tax transparency guidelines outlined by the European Union while providing clear public reporting on financial activities.
