Public CbCR: the new communication on income taxes
The Public CbCR (Public Country-by-Country Reporting) is the latest of the tax obligations introduced as part of the same OECD/G20 BEPS (Base Erosion and Profit Shifting) Project that also gave rise to CbCR reporting and the Global Minimum Tax. All three measures address the same objective: preventing large multinational groups from artificially shifting their profits to jurisdictions with more favourable tax regimes by introducing specific reporting and monitoring obligations. CbCR reporting supports the exchange of confidential information between tax authorities; the Global Minimum Tax ensures a minimum effective tax rate of 15% on the profits of large groups; Public CbCR, instead, goes one step further, as it makes part of the same data publicly available, accessible to anyone and not only to tax authorities.
What the obligation entails
The obligation, implemented in Italy in 2024 and effective for financial statements relating to financial years beginning on or after 22 June of that year, is of a disclosure nature and not a tax obligation. The companies concerned must prepare a document indicating, for each tax jurisdiction in which the group operates, revenues, profit before tax, taxes paid and accrued, number of employees, and undistributed profits. The document must be made public: it must be filed with the Business Register and published on the company’s website, where it must remain available for consultation for at least five years.
This is a recurring annual obligation, not a one-off compliance requirement: it must be fulfilled for each financial year for as long as the group remains above the relevant threshold, within twelve months from the end of the financial year — therefore, for 2025, by 31 December 2026.
Entities subject to the obligation
Where the consolidated turnover of the group exceeds €750 million in each of the previous two financial years, four categories of entities are required to comply:
the Italian ultimate parent company;
the Italian standalone company, not belonging to any group;
the Italian subsidiary controlled by a parent company located in a third country (outside the EU) and included within its consolidation perimeter;
Italian branches of non-EU companies, unless their net revenues do not exceed €11 million.
The third category is the most delicate one in practice and deserves particular attention. The €750 million threshold is not measured based on the revenues of the Italian subsidiary, but on the consolidated financial statements of the foreign parent company. This means that even a very small Italian company remains subject to the obligation solely because it belongs to a multinational group that, as a whole, exceeds that threshold. The law does not provide, for this category, any size-based exemption or safeguard for the Italian subsidiary: the obligation applies regardless of its individual size and concerns every Italian company within the group that is resident in Italy and included in the consolidation perimeter of the foreign parent company.
Main exemptions
Not all companies exceeding the threshold are actually required to file the communication. First of all, groups and standalone companies established in a single EU Member State and in no other tax jurisdiction are exempt, as in such cases the underlying rationale of the rule — the cross-border nature of the activity — does not apply. A full exemption also applies to entities subject to the banking supervision provisions of the Bank of Italy.
For non-EU groups, the most common case is instead the equivalence exemption: the Italian subsidiary is not required to prepare the communication if the parent company located in the third country publishes an equivalent report, provided that the document is freely accessible both on the parent company’s website and on the subsidiary’s website, is drafted in at least one official language of the European Union, and expressly indicates the name and registered office of the Italian subsidiary.
Even where these conditions are met, however, the exemption is never complete — and this is the point that creates the greatest practical confusion: it only concerns the preparation of the document, not the filing or publication requirements. The Italian company is still required to file the communication prepared by the parent company with the Business Register and to publish it on its own website, keeping it available for consultation for at least five years. If the foreign parent company does not publish anything, or if even one of the required conditions is not met, the exemption does not apply at all: the Italian subsidiary must then prepare the communication itself, using the data available to it, and expressly stating that the parent company has not cooperated.
Finally, the sanctions framework is not lenient. In the event of failure to file or inaccurate filing, liability falls personally on the directors, rather than on the company, with administrative penalties that may reach up to €50,000.
Tax & Legal Research Hub
Centro Studi e Pianificazione Fiscale
Responsabile
Dott. Valerio Locatelli
Coordinatore
Dott. Giancarlo Marengo
