The Council of the European Union has published a consolidated compromise proposal on the introduction of public Country-by-Country (CbC) reporting, which has been debated for several years and is again being pushed by the Portuguese Presidency of the Council. The consolidated compromise proposal has been provided, for ease of reference, in preparation for a working party meeting scheduled on 22 January 2021.

The main changes included in the consolidated compromise proposal concern the purpose of public CbC reports. This includes additional language concerning the enhancement of public scrutiny of MNEs as follows:

"Providing for such scrutiny is also necessary to promote a better informed public debate regarding in particular the level of tax compliance of certain multinational undertakings active in the Union and the impact of this on the real economy. The setting of common rules on corporate income tax transparency will also serve the general economic interest by providing for equivalent safeguards throughout the Union for the protection of investors, creditors and other third parties generally, and thus contributing to regaining the trust of citizens of the Union in the fairness of the national tax systems."

Another important change is the removal of the following:

"At the same time it is stressed that, as concluded by the G20 and the OECD, country-by-country reports will be helpful for high-level transfer pricing risk assessment purposes only. The information in the Country-by-Country Report on its own does not constitute conclusive evidence that transfer prices are or are not appropriate and that information should not be used as a substitute for a detailed transfer pricing analysis of individual transactions and prices based on a full functional analysis and comparability analysis."