Today, the first Public Country-by-Country reports are due in Australia and Europe for fiscal year taxpayers with a June 30 year-end. Calendar-year taxpayers will submit reports by December 31, 2026. These reports are separate from confidential Country-by-Country reports, which companies have submitted to tax authorities for several years.
While both the Australian and European regimes aim to increase transparency, they are based on different legal frameworks and reporting rules that limit comparability. The starting point for each of these reports is financial accounting data, but there are several differences and required adjustments that could lead to misinterpretations about the actual economic activity occurring in a particular country. For example, reported revenue amounts may double count intra-company sales common in complex multinational supply chains, leading to artificially inflated revenues. Country-by-Country reports also do not take into account routine tax outcomes, such as refunds from prior-year overpayments, audit adjustments, or the use of loss carryforwards, which may create volatility in reported tax paid that does not reflect current-year activity.
Furthermore, these reports do not reconcile with U.S. financial reporting, which uses other standards and rules. As a result, Country-by-Country reports may create confusion if viewed without the proper context. Accordingly, stakeholders, including lawmakers, should exercise caution when drawing conclusions based on comparing data across jurisdictions or to financial reporting metrics.
More Information
More details about Australia’s reporting requirements can be found here.
For more details about reporting in the European Union, please see EU Directive 2021/2101.
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About the NFTC
The National Foreign Trade Council (NFTC) is the premier business association advancing trade, tax, national security, and supply chain policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses, who account for over $6 trillion in revenue and employ nearly 6 million people in the United States.
