On 4 July 2017, the European Parliament votes on new tax transparency rules for large multinational companies.
On 12 April 2016, the European Commission put forward a proposal on public country-by-country reporting to oblige large firms to disclose, together with other relevant information, the profits made and taxes paid in each EU country. According to the EC proposal, information would have to be disclosed also for a yet-to-be-agreed list of tax haven jurisdictions outside the EU, while only aggregate figures would have to be provided for operations in other tax jurisdictions in the rest of the world. While MEPs voted on 12 June 2017 to strengthen the Commission’s proposal requiring multinational companies to disclose disaggregated information for all countries in which they have operations worldwide (in and outside the EU), they also introduced a new exemption mechanism that provides corporations with the possibility to ask for exceptions to the disclosure of certain sensitive information in countries outside the European Union when there are concerns about commercial confidentiality. This new ’get out’ mechanism could potentially be exploited by corporations looking to keep profits hidden in tax havens.
EFFAT joins the European Trade Unions Confederation (ETUC) in urging the EP Plenary of 4 July 2017 to limit the wide exemption granted for the protection of ‘commercially sensitive information’ and to vote in favour of the amendment tabled by the Co-Rapporteurs introducing a time-limit for companies to publish the omitted information after a certain period of time (period of two to four years).
Enrico Somaglia, EFFAT Company Policy Officer commented on tomorrow’s vote: “Tax evasion and tax avoidance constitute a real threat to fair competition and are a critical challenge to the sustainability of public services and their availability for all citizens. A number of scandals showed that the tools currently available to EU authorities are insufficient to properly address these issues. The adoption of full public country-by-country reporting is a first step that goes in the right direction, but only without any loophole that risks to jeopardize the aim of the whole proposal!”
For more information:
EFFAT Company Policy Officer
T. +32 2 209 62 68