Country-by-Country Reporting: European Parliament gives in to tax tricks of multinationals
A press release by Fabio De Masi
In a joint meeting on Monday evening, the Committee for Economic and Monetary Affairs (ECON) and the Committee for Legal Affairs (JURI) adopted the report on Country-by-Country reporting. It obliges multinational corporations with an annual net turnover of 750 million euros and above to publicly disclose, in every country they are active in, certain economic indicators, such as their profits or taxes paid. This measure shall help in laying bare the tax tricks of companies. MEP Fabio De Masi (DIE LINKE.), Member of the Committee for Economic and Monetary Affairs and Vice Chair of the European Parliament’s Inquiry Committee into Money Laundering, Tax Avoidance and Tax Evasion (PANA), comments on the result of the vote:
“Public country-by-country reporting is an important weapon in our fight for greater tax justice. It is thus all the more regrettable that the liberals and the conservatives have disarmed the public. According to the OECD, the 750 million euro reporting threshold will spare 85-90 per cent of multinational companies. In the shareholder directive, the European Parliament still applied the 40 million euro threshold, which is the EU definition for large undertakings.
On top of that, the liberals have created a glaring loophole in the report, which will allow corporations to escape their reporting obligation under the pretext of vaguely defined commercially sensitive information. In addition, retroactive publication of the information and rough reporting obligations are no longer part of the text. The left group could have only agreed to the compromise if exemptions had been temporally limited and if exemptions had still entailed the reporting of rough data.
“This result puts Parliament in a weak position for the upcoming trilogue negotiations. The central points of the report, i.e. unhindered public access to the country specific reports and the publication of reports for every country a company is active in, must survive the trilogue. Reporting obligations only for EU Member States and third countries on the tax haven black list – which diplomatic horse-trading is turning into a farce – would only open up new loopholes. The EU would then lag behind the standards of Vietnam."
Further parliamentary procedure:
As a next step, the report will have to be voted in Parliament’s plenary, before the trilogue negotiations between Council, Commission and Parliament begin.