Public CbCR Exemption Not Available to Non‑EU UPE Groups

Non‑EU headquartered banking and investment groups should not assume that Article 89 CRD IV disclosures by their EU affiliates will exempt them from public CbCR. In most cases, those disclosures cover only local EU activities and not the worldwide group, meaning that every medium-sized or large EU subsidiary (or, where applicable, every qualifying branch), will need to publish a separate public CbCR report on the non‑EU UPE.

Where the non‑EU parent does not provide the necessary data, EU entities will have to report on a "best effort" basis, with possible reputational as well as compliance consequences. With the first Dutch filings due by the end of 2026 for FY2025, financial institutions should map the interaction between CRD IV and public CbCR now, engage with head office on data sharing, and align their tax, finance, legal and communications functions.

For financial undertakings, and in particular foreign banks with activities in Europe, it is advised to map out the interaction between CRD IV reporting and public CbCR at an early stage. A timely review helps prevent both duplication of work and the risk of non-compliance.

Public CbCR marks a significant shift in tax transparency. Whereas private CbCR data is shared exclusively with tax authorities, public CbCR information is accessible to a wide audience, including journalists, NGOs, the general public, and tax authorities themselves.

The information to be disclosed typically includes:

• the number of employees on a full-time equivalent basis;
• revenues;
• profit or loss before income tax;
• the amount of income tax accrued during the relevant financial year; and
• the amount of income tax paid on a cash basis.

Data must be presented for each EU Member State and separately for jurisdictions included on the EU blacklist and grey list of non-cooperative jurisdictions.

Companies may rely on the OECD private CbCR guidance to determine how to calculate the required data points or, alternatively, follow the definitions set out in the EU Directive and its Implementing Regulation 2024/2952.

In the Netherlands, the public CbCR report must be filed with the Dutch Trade Register (Kamer van Koophandel) and published on the entity's website no later than twelve months after the end of the financial year. Data relating to financial year 2025 (where aligned with the calendar year) must therefore be published by the end of 2026 at the latest.

Ultimate Parent Undertaking and reporting obligation

An Ultimate Parent Entity (UPE) is defined as an undertaking that prepares consolidated financial statements for the largest group of undertakings. To fall within the scope of public CbCR, the UPE must have consolidated revenue exceeding EUR 750,000,000 on its balance sheet date in each of the last two consecutive financial years, as reflected in its consolidated financial statements.

The reporting obligation depends on the law governing the UPE and is regulated as follows:

• EU headquartered groups: if the UPE is governed by the law of an EU Member State (e.g. a Dutch BV or NV), only this UPE is required to publish a report, covering the entire group.
• Non-EU headquartered groups: every medium or large EU subsidiary, and every "qualifying" branch, must publish a CbC report regarding the non-EU UPE. Where the UPE does not share the necessary information, the EU entity must report on a "best effort" basis using the information available to it.

A Dutch subsidiary qualifies as medium or large where two of the following three thresholds are met: a balance sheet total exceeding EUR 7.5 million, net turnover exceeding EUR 15 million, or more than 50 employees on average. For qualifying branches, the relevant criterion is net turnover exceeding EUR 15 million. These thresholds differ between EU Member States, as well as to which years the assessment of the thresholds will need to take place

The Public CbC Reporting Exception for Ultimate Parent Undertakings or Their Affiliates

The EU Directive provides an exception from the obligation to report for UPEs (or their affiliates) that already publish a report in accordance with Article 89 of Directive 2013/36/EU (CRD IV).

The reporting regime under Article 89 has been in place since 2014 and applies to banks and certain investment firms subject to Regulation (EU) No 575/2013 (CRR) and Directive 2013/36/EU (CRD).

The information disclosed under Article 89 includes:

• the name(s), nature of activities and geographical location of entities;
• turnover;
• the number of employees on a full-time equivalent basis;
• profit or loss before tax;
• tax on profit or loss; and
• public subsidies received.

The purpose of the CbCR exemption is to avoid duplicative reporting for UPEs (or their affiliates) that already disclose comparable information annually under Article 89 CRD IV. Where an UPE (or its affiliates) already publishes group-wide country-by-country information in accordance with Article 89 CRD IV, it is not required to prepare a separate public CbCR report -  provided that the Article 89 report covers all activities of all affiliated undertakings included in the consolidated financial statements.

The CRD IV exemption for UPEs and their affiliates

The wording of the exemption refers to UPEs and their affiliates. Since non‑EU UPEs are not themselves subject to Article 89 CRD IV, they cannot directly benefit from this exemption.

In theory, the exemption could still apply if an EU subsidiary or branch of a non‑EU UPE discloses information under Article 89 CRD IV that covers the entire group. In practice, however, the Article 89 disclosure made by such EU affiliates typically only covers the activities concentrated in the EU Member State in which they operate - not all activities of the worldwide group.

As a result, the exemption is effectively out of reach for most non‑EU headquartered banking and investment groups. Their medium-sized and large EU subsidiaries (and qualifying branches) will need to prepare and publish a public CbCR report on the non‑EU UPE, often on a "best effort" basis where head office cooperation is limited.