The European Union’s Public Country-by-Country Reporting (CbCR) Directive aims to make where multinationals operate and where they pay tax visible to investors, regulators, and the public. To that end, it requires large multinationals to publish jurisdiction-level data on revenues, profits, taxes, and employees. This report asks whether the Directive delivers on that objective. We examine three questions: does the regime add new public information, how complete is the disclosure, and how much of multinational activity does its geographical design make visible? Romania was the first Member State to transpose the Directive, with rules applying from financial year 2023. The Romanian filings are therefore the first mandatory disclosures under a framework that will soon apply across all 27 Member States, and provide the first empirical evidence on how multinationals respond to the Directive.

We construct the first comprehensive dataset of public CbCR filings: 144 multinationals from 24 headquarters countries, covering financial years 2023 and 2024, for a total of 164 reports. No centralised repository exists, and the data requires multilingual searches across company websites, followed by information extraction from heterogeneous PDFs. Each report was read in full and classified by geographical scope, variable completeness, and the reasons firms provide for incomplete disclosure.

Three findings emerge. First, on coverage and additionality: the Directive does add new public information, since the majority of multinationals now publishing have no prior voluntary disclosure history. But coverage falls short of the Directive’s theoretical scope: 20% of the 569 non-EU multinationals estimated to be in scope have published a report. Second, on disclosure quality: 38% of reports are incomplete, most commonly limited to Romania only Apple, Nestlé, and Procter & Gamble among them). The main causes are parent non-cooperation and safeguard clause invocations. Third, on geographical reach: the Directive’s design leaves a large share of multinational activity outside country-level disclosure. Separate reporting is required for EU Member States and jurisdictions on the EU non-cooperative list. Activity in other jurisdictions may be aggregated into a residual “Others” category that absorbs 71% of profits and 74% of revenues in the Romanian data. Because the early reporters are predominantly non-EU-headquartered, this residual is largely a proxy for parent-jurisdiction activity. The non-cooperative list, the Directive’s strongest transparency guarantee, has narrow coverage and qualitative compliance criteria that only partially match the geography of contemporary profit shifting.

Some of these gaps are transitional, while others are structural and require legislative reform. The Commission’s review should prioritise three changes. First, widen disclosure on two axes. Geographically, mandate separate reporting for more jurisdictions, in particular the ultimate parent’s home country. In terms of variables, add items such as tangible assets and the split between related- and unrelated-party revenues. Second, address parent non-cooperation, which currently reduces many subsidiary reports to Romania-only disclosure. Third, establish a centralised repository for filings.

This report examines the evolution of harmful corporate tax practices in recent years, as well as the development of blacklists intended to identify such practices. First, it shows that harmful tax practices are no longer confined to easily identifiable jurisdictions known for aggressive tax policies. Second, it finds that current blacklists—although they may be linked to potentially effective sanctions—are generally too limited in scope to produce significant economic effects. Finally, the report proposes enhanced criteria for constructing blacklists of harmful tax regimes. In particular, it argues that introducing a quantitative criterion based on effective tax rates is essential to account for the recent evolution of harmful tax competition.

Over the last 10 years, governments have launched major initiatives to reduce international tax evasion. These efforts include the creation of a new form of international cooperation long deemed utopian – an automatic, multilateral exchange of bank information in force since 2017 and applied by more than 100 countries in 2023 – and a landmark international agreement on a global minimum tax for multinational corporations, endorsed by more than 140 countries and territories in 2021.

Yet despite the importance of these developments, little is known about the effects of these new policies. Is global tax evasion falling or rising? Are new issues emerging, and if so, what are they? These questions are of tremendous importance in a context of rising income and wealth inequality, high public debt in the post-Covid-19 context, and large government revenue needs for addressing climate change and for funding health care, education, and public infrastructure.

This report addresses these issues thanks to an unprecedented international research collaboration and major data improvements. Prepared by the staff of the EU Tax Observatory – a research laboratory created in 2021 with unique expertise on international tax issues – this report summarizes work conducted by more than 100 researchers all over the world, often in partnership with tax administrations. This work leverages the availability of new data on the activities of multinational companies (such as country-by-country reports) and the offshore wealth of households (from the automatic exchange of bank information) created by the policy initiatives of the last decade. This report is the first systematic attempt at taking stock of this informational big bang.

We should make it clear at the outset that we do not restrict this report to the study of tax evasion in a narrow sense of fraud. Nor do we cover all forms of evasion, far from it. Our focus is on the issues that have been the focus of international policymaking over the last decade, the challenges posed by globalization for the taxation of multinational companies and high-net-worth individuals. Some of the practices we cover are clearly illegal – such as failing to report income earned on offshore bank accounts. Others are in a legal grey zone between avoidance and evasion – such as shifting profit to shell companies with no economic substance. Others are clearly legal, such as moving abroad to benefit from special tax regimes designed to attract wealthy individuals. All, however, allow the economic actors who have most benefited from globalization to reduce their tax rates to even lower levels, reducing government revenue, and increasing inequality. What is at stake in all cases is the question of the social sustainability of globalization and of modern tax systems.

We uncover positive evolution worth celebrating, but also setbacks, and major issues that remain unaddressed.

• First, offshore tax evasion by wealthy individuals has shrunk. Thanks to the automatic exchange of bank information, we estimate that offshore tax evasion has declined by a factor of about three over the last 10 years. This success shows that rapid progress can be made against tax evasion if there is the political will to do so.
• Second, the global minimum tax of 15% on multinationals, which raised high hopes in 2021, has been dramatically weakened. Initially expected to increase global corporate tax revenues by close to 10%, a growing list of loopholes has reduced its expected revenues by a factor of 2 (and by a factor of 3 relative to a comprehensive minimum tax of 20%).
• Third, tax evasion – including grey-zone evasion at the border of legality – is increasingly happening domestically. Global billionaires have effective tax rates equivalent to 0% to 0.5% of their wealth, due to the frequent use of shell companies to avoid income taxation. To date no serious attempt has been made to address this situation, which risks undermining the social acceptability of existing tax systems.

We make six proposals to address the issues identified in this report. A key proposal is to institute a global minimum tax on billionaires, equal to 2% of their wealth. We provide a first estimation of the revenue potential of this measure, showing that it would raise close to $250 billion (from less than 3,000 individuals) annually. A strengthened global minimum tax on multinational companies, free of loopholes, would raise an additional $250 billion per year. To give a sense of the magnitudes involved, recent studies estimate that developing countries need $500 billion annually in additional public revenue to address the challenges of climate change1 – needs that could thus be fully addressed by the two main reforms we propose. All proposals, including potential objections, are thoroughly detailed in Chapter 5.

A key message of this report is that tax evasion is not a law of nature but a policy choice. As interconnected nations we can choose free-for-all policies that allow it to fester, or we can choose coordination to curb it. It is also possible to make major progress through unilateral action, should ambitious global agreements fail.