Public Country-by-Country Reporting: Irish CLO Issuers

Executive Summary

Public Country-by-Country Reporting (“Public CbCR”) is an EU transparency regime requiring certain Irish entities to publicly disclose income tax information. An Irish CLO issuer may be within scope if it is a medium-sized or large entity and its ultimate parent for accounting purposes has consolidated revenue exceeding €750 million in two consecutive financial years.

The first reporting deadline for most in-scope entities is 31 December 2026 (in respect of financial years beginning on or after 22 June 2024). CLO managers should assess whether their CLO issuers are within scope and, if so, what steps can be taken to manage the obligation.

Background on Public CbCR

Public CbCR was introduced by EU Directive 2021/2101 (the “Directive”), amending EU Directive 2013/34 on financial reporting. The Directive was transposed into Irish law by S.I. No. 322/2023 (the “Regulations”). The Regulations apply to financial years beginning on or after 22 June 2024.

The regime requires certain large multinational undertakings and their subsidiaries to publicly disclose, on a country-by-country basis, information relating to income tax. Public CbCR is distinct from existing OECD / BEPS country-by-country reporting (which is a confidential filing with tax authorities) and from Pillar Two (which imposes a minimum effective tax rate). Public CbCR is a transparency and disclosure regime only; it does not impose any tax liability.

When is an Irish CLO issuer within scope?

A CLO issuer will typically be within scope if:

(a) it is consolidated on a line-by-line basis in the financial statements of a non-EU ultimate parent (typically the collateral manager or an entity in its group); and
(b) the consolidated revenue of that ultimate parent exceeds €750 million in both the immediately preceding and current financial years.

Most Irish CLO issuers are not consolidated by any other entity and therefore would not be within scope of Public CbCR. However, the obligation may arise where a CLO issuer is consolidated, for example, by the collateral manager or retention holder’s group.

The CLO issuer must itself be a “medium-sized” or “large” undertaking. The relevant thresholds require that the entity exceed at least two of the following three criteria:

(a) balance sheet total (i.e., total assets) of €5 million;
(b) net turnover of €10 million; and
(c) average of 50 employees.

As Irish CLO issuers have no employees, they will only fall within scope if they meet both the balance sheet total and net turnover limbs. An Irish CLO issuer is expected to exceed the balance sheet total threshold of €5 million (due to the €10 million day-one funding test, which is a condition to qualify as a section 110 company). Therefore, the key test is the net turnover test. Ascertaining the turnover may require consideration of the accounting standards used by the CLO issuer.

There is no general exemption for investment funds or securitisation entities. Unlike Pillar Two, where certain securitisation entities may be exempted from domestic top-up taxes, the Public CbCR regime applies to all medium-sized or large Irish subsidiary undertakings of a qualifying ultimate parent.

What does the reporting involve?

The report must include a significant amount of information, on a jurisdiction-by-jurisdiction basis for each EU Member State and for each jurisdiction on the EU list of non-cooperative and grey-list jurisdictions. The information includes details of the ultimate parent entity, subsidiaries, a description of the activities, number of employees, revenue and income tax paid. Information for non-EU jurisdictions may be presented on an aggregated basis.

For example, if a consolidated CLO issuer is the only EU entity in the group and there are no entities in a non-cooperative or grey-list jurisdiction, the report would disclose the CLO issuer on a standalone basis and the rest of the world in aggregate.

The Directive and the Regulations provide for three publication options:

• on the company’s website (which is not typically relevant to CLO issuers);
• via the Irish Companies Registration Office’s CbCR Document Library; or
• on the website of the ultimate parent.

In cases where the CLO issuer is part of a consolidated group with other EU entities, the reporting requirements may arise in several jurisdictions. Publication on the ultimate parent’s website may be useful in this case, as it effectively allows for a centralised EU filing.

The report must be published within 12 months of the end of the relevant financial year. The relevant financial year is determined based on the financial year of the ultimate parent. For in-scope entities whose ultimate parent’s financial year-end is 31 December, the first report in relation to the year ended 31 December 2025 is due on 31 December 2026.

Options to Manage the Application of the Rules

Public CbCR is in its early days, and no settled industry approach has emerged for CLOs. However, the industry has focused on a number of points, including how turnover is measured, whether consolidation treatment is required and whether the group revenue thresholds are satisfied.

The Regulations permit specific items to be omitted from the report where an undertaking forms the view that their inclusion would be seriously prejudicial to its competitive position. This is not a blanket exclusion but a temporary deferral; the omitted information must be published within five years.

The deferral must be accompanied by a reasoned explanation. There is no statutory definition of “serious prejudice”, but the wording suggests a high bar. The deferral is not available for information in relation to entities in a non-cooperative or grey-list jurisdiction.

Consequences of Non-Compliance

The directors of a CLO issuer are directly responsible for compliance and may face a summary conviction and a fine for non-compliance. Imprisonment is also technically possible.

A CLO issuer’s statutory auditors are required to state in their audit report whether the entity was required to publish a CbCR report and, if so, whether it was published in compliance with the Regulations. Non-compliance will therefore be publicly flagged in the auditor’s report.

This note is a general guide only and is not intended to be definitive advice on any point and should not be relied upon without prior legal advice.

For further information, please liaise with your usual Maples Group contact or any of the persons listed.