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June 17, 2024

Italy issues draft Public CbCR decree

  • On 10 June 2024, the Italian Council of Ministers approved a draft legislative decree introducing Public Country-by-Country Reporting (PCbCR) legislation (Draft Decree) in Italy, which is now awaiting Parliament's opinion.
  • In line with European Union (EU) Directive n. 2101 of 24 November 2021 (Country-by-Country Reporting or CbCR Directive), reporting obligations apply to Multinational Groups (MNEs) with consolidated turnover exceeding €750m in each of the last two consecutive financial years.
  • Penalties for noncompliance are imposed on the Italian Directors and generally range from €10,000 to €50,000.

Executive summary

On 10 June 2024, the Italian Council of Ministers approved the Draft Decree introducing PCbCR legislation in Italy by transposing the CbCR Directive which amends Directive 2013/34/EU (the so-called "Accounting Directive") concerning disclosures on income tax by certain companies.

The Draft Decree intends to implement and align Italian legislation to the provisions of the CbCR Directive, which requires large multinationals to publicly divulge income tax-related information per each Member State jurisdiction, as well as for jurisdictions included in the EU list of noncooperative jurisdictions. Data regarding other jurisdictions may also be included.

Information required under the newly introduced PCbCR is already part of the existing CbCR but shared only between tax administrations. The new obligation will not replace the existing CbCR but will additionally require in-scope multinationals to separately share selected information with the public. To simplify the compliance with the new obligation, the Draft Decree allows MNEs to alternatively opt for directly disclosing the entire CbCR to the public.

As confirmed by the Council of Ministers' press release of 10 June 2024, the CbCR Directive aims to increase the transparency of companies and the public scrutiny of companies' tax strategies for the benefit of all stakeholders.

The Draft Decree is now subject to parliamentary opinion and is expected to become effective in the coming months and applicable for financial years starting on or after 22 June 2024.

Detailed discussion


On 1 December 2021, the European Union published in its Official Journal the EU Public CbCR Directive (see also EY Global Tax Alert, EU Public CbCR Directive enters into force on 21 December 2021, dated 2 December 2021).

The CbCR Directive requires both EU-based MNEs and non-EU-based MNEs doing business in the EU through a branch or subsidiary with total consolidated revenue exceeding €750m in each of the last two consecutive financial years to disclose a set of information regarding income tax-related matters. Such information needs to be disclosed for all EU Member States and all jurisdictions included in the Annex I and Annex II of the Council conclusions on the EU lists of noncooperative jurisdictions for tax purposes (so-called EU "blacklist" and "gray list").

The Directive entered into force on 21 December 2021. EU Member States were required to transpose the Directive into national law by 22 June 2023.

Scope of the law

In line with the Directive, the Draft Decree introduces filing and disclosure obligations for multinational companies with revenues exceeding €750m in each of the last two consecutive financial years.

Among other things, the Draft Decree provides that selected information shall be made public via:

  • Disclosure with the Company Registrar
  • Publication on companies' website
  • Deposit within 12 months from the end of the relevant financial year

Reporting entities

The Draft Decree provides that (i) Italian parents of groups with consolidated revenue exceeding €750m in each of the last two consecutive financial years, (ii) Italian companies exceeding this revenue threshold on a stand-alone basis and (iii) Italian companies that do not exceed the threshold but belong to consolidated groups not established in a Member State that meet the threshold, are subject to reporting obligations (Reporting Entity). Under certain circumstances, Reporting Entities may also include Italian permanent establishments.

An Italian subsidiary that is part of a consolidated group not established in a Member State (e.g., a US group) exceeding €750m in revenues on a consolidated basis shall file the PCbCR with a specific breakdown for all the applicable jurisdictions. If the parent is not willing to share the relevant information with the Italian affiliate, the affiliate will nonetheless be required to file a report with any of the parent's information at its disposal and state that the foreign company did not provide the requested information. A similar provision applies to Italian permanent establishments qualifying as Reporting Entities. Italian companies and permanent establishments belonging to non-EU parented groups, even if not qualifying as Reporting Entities, are still subject to reporting obligations if they were set up for the sole purpose of avoiding the application of the reporting rules.

Exclusions from the obligation apply for companies that:

  • Are already subject to reporting obligations according to the so-called "unified body of laws on banking and credit matters"
  • Operate in one Member State jurisdiction only
  • Are part of a Group whose ultimate parent is established in a jurisdiction, other than a Member State, that applies comparable disclosure obligations

Content of the Report

Reporting Entities must prepare and file with the Italian Enterprise Registrar various pieces of information (Report), including: the name of the Reporting Entity, specification of the reported financial year, currency used for the Report, a list of the entities included the consolidated group with specific detail regarding their respective residence jurisdictions (in the case of Italian parents qualifying of Reporting Entities), a brief description of the each company's business, number of employees, stand-alone revenue (including amounts stemming from intercompany transactions), stand-alone profit or loss for the year (before income taxes), income taxes accrued and paid in each jurisdiction, and amount of retained earnings at the end of the relevant financial year.

Information should be broken down at a jurisdictional level (i.e., aggregating entities within the same jurisdiction), and all Member States should be disclosed, as well as jurisdictions included in the EU lists of noncooperative jurisdictions. Information on other jurisdictions may also be included on a voluntary basis.

Filing the Report

The Report needs to be filed with the Company Registrar not later than 12 months from the end of the relevant financial year. The filing shall contain a confirmation that the Report has also been published in the company's website.

The Draft Decree clarifies that the Report is to be filed in Italian or in the language commonly used in the context of international finance. The Report remains available for public consultation for five years.

Penalties applicable

Directors of Reporting Entities that fail to comply with the requisite obligations (either by not respecting the relevant deadline or by failing to include relevant data) are subject to administrative penalties ranging from €10,000 to €50,000. Under certain circumstances, these penalties may be doubled.


MNEs with entities in Italy will want to become familiar with the requirements of Draft Decree and plan ahead for Government's enactment of the new rules.

For further information, see EY's PCbCR developments tracker: EU Public Country-by-Country Reporting (PCbCR) Developments Tracker | EY - Global.

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Contact Information

For additional information concerning this Alert, please contact:

Studio Legale Tributario, Milan

Studio Legale Tributario, Rome

Studio Legale Tributario, Bologna

Studio Legale Tributario, Florence

Studio Legale Tributario, Torino

Studio Legale Tributario, Treviso

Studio Legale Tributario, Verona

Ernst & Young LLP (United Kingdom), Italian Tax Desk, London

Ernst & Young LLP (United States), Italian Tax Desk, New York

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor