Large multinationals are obliged to disclose tax on profits
From now on, large multinationals will be obliged to disclose annually how much tax on profits they pay worldwide. It concerns companies that have branches in multiple countries and realise net sales in excess of € 750 million. Mandatory disclosure of the tax on profits increases transparency in respect of the tax paid by multinationals worldwide. It is intended to induce companies to do business in a responsible manner from a tax perspective and pay tax in the countries where they have operations and realise profits.
Report
This obligation applies to multinationals that are established in the Netherlands. In addition, medium-sized and large subsidiaries that are established in the Netherlands and whose parent company is established outside the EU and generate worldwide sales in excess of € 750 million, are obliged to publish a report on the tax on profits of the entire group of which they are a part.
The tax on profits must be included in a separate report, together with a description of the company’s activities and details concerning the number of employees, the income and total profits. This information must be broken down for each Member State of the European Union and each country that has been designated as a tax haven. The information may be bundled for all other countries. The report is filed at the Commercial Register.
European Directive
The Council of Ministers has agreed to the decision that implements a European Directive that forms part of European policy to combat tax avoidance. The obligation applies from the financial years that start on or after 22 June 2024. For the majority of companies this means that they will have to file a report with the Commercial Register for the 2025 financial year at the latest on 31 December 2026.