Public Country-by-Country Reporting transposed into Maltese Legislation.

Publication
June 24, 2024

The EU’s public country-by-country reporting (Public CbCR) Directive (the Directive), has been transposed into Maltese legislation on 17 May 2024.

Based on the newly published law, the Public CbCR will take effect in Malta for accounting periods beginning on or after 22 June 2024. For in-scope multinational enterprises (MNEs) who prepare their consolidated financial statements on a calendar-year basis, Public CbCR first applies from 1 January 2025.

MNEs based in the EU and non-EU-based MNEs doing business in the EU through a branch or subsidiary with a consolidated annual revenue of at least €750m for two consecutive years fall within the scope of the Directive.

Such MNEs will be required to publicly disclose the income taxes paid and other tax-related information such as profits, revenues and employees.

The Public CbCR is an additional requirement for MNEs besides the existing CbCR obligations, that have been in place for several years, requiring MNEs to report similar information to the tax authorities.

Which MNE groups fall within the scope of the Public CbCR Directive?

The reporting obligation applies to the below categories of companies with a (group) revenue of at least EUR 750 million in the relevant year and previous year:

The ultimate parent company (UPE);
A stand-alone company that does not belong to a group;
Medium-sized and large companies¹that are a subsidiary of a company that is not established in an EU Member State²; or
Qualifying fixed establishments/ branches with a net turnover of more than EUR 8 million that belong to a group whose UPE is located outside the EU.

Alternatively, in the cases of the third and fourth points, where the non-EU UPE draws a report of the tax information and such report is available on the UPE’s website, the UPE may assign one of the EU subsidiaries and branches to file the report with the national business registry.

Reporting obligations

EU UPE
Non-EU UPE with qualifying EU presence

EU UPE

Disclosure obligations lie with the EU UPE

Non-EU UPE with qualifying EU presence

Each medium size and large EU subsidiary/ branch is required to publish CbC tax information;

Non-EU parent publishes tax information and assigns one of the EU subsidiaries/branches to file the report with the national trade registry

What information is required to be disclosed?

The Public CbCR should cover specified data for the whole group.

The information must be broken down for each EU Member State where the group is active and also for each jurisdiction deemed non-cooperative by the EU or that has been on the EU’s ‘grey’ list for a minimum of two years.

Information concerning all other jurisdictions may be reported on an aggregated level.

Comparison of CbCR data requirements	CbCR	Public CbCR
Total Revenue	✔	✔
Revenue from third parties	✔	✘
Revenue from related parties	✔	✘
Profit/loss before tax	✔	✔
Cash tax paid	✔	✔
Tax Accrued	✔	✔
Tangible assets other than cash and cash equivalents	✔	✘
Number of employees	✔	✘
Total accumulated earnings	✔	✔
Share capital	✔	✘

Where, when and how is the information required to be published?

The tax information should be:

Made accessible in at least one of the official languages of the EU;
Be published within 12 months of the balance sheet date of the financial year for which the report is drawn - otherwise, penalties apply;
Be published on the website of the UPE/ standalone entity/ subsidiary undertaking or branch;
Be delivered to the Malta Business Registry within 14 days from publication;
Remain accessible for 5 years.

Concerning undertakings that require their financial statements to be audited, the statutory auditor is required to report whether, for the financial year preceding the financial year for which the financial statements under audit were prepared, the undertaking was required to draw up a report on income tax information, and if so, whether this report was published.

Exemptions

Public CbCR does not apply to standalone undertakings or UPEss and their affiliated undertakings (including branches), which are established within the territory of a single Member State, a state which is a member of the European Economic Area and no other tax jurisdiction.
Malta has opted to allow companies to temporarily (up to five years) omit specific data from the declaration in those cases where this would be particularly detrimental to the company’s commercial position.
A general exemption applies for banks that are already subject to income tax disclosure requirements under Article 89 of Directive (EU) 2013/36/EU.

How can we help?

PwC can provide support and guidance on EU Public CbCR disclosure requirements for non-EU-parented groups.

1 Medium-sized and large subsidiaries are subsidiaries that, at the balance sheet date, exceed two of the following three criteria: (i) Total assets: €4m; (ii) Net turnover: EUR 8 million; (iii) Average number of employees: 50.

2 Reference to EU Member States includes Members of the EEA