Multinational companies with a global turnover of at least €750 million are to be required to publish on a country-by-country basis their profits and paid taxes according to a new EC proposal unveiled last Tuesday (12 April) in Strasbourg. Country-by-country public reporting would be required for all 28 EU member states (provided that the company makes business in all of them), as well as for each tax haven worldwide. An aggregate number would be published covering the remaining tax jurisdictions. This proposal comes days after the Panama Papers revelations and is a continuation of the EC´s drive against tax fraud and evasion. Only recently have the Member States agreed on country-by-country reporting of multinationals to tax authorities. Making the data publicly available is the next step – it enables public scrutiny and should force multinationals to pay their fair share of taxes in jurisdictions where their profits are really made. Reactions to the proposal were quick to follow. As expected, the business community criticized the proposal pointing out that it would be a disadvantage vis-a-vis competitors to publish some crucial business data (profits and taxes, but also numbers of employees and other data). Transparency advocates, on the other hand, feel that the information required to be published is not complete enough. The new rules were proposed by the EC as a reform of the Accounting Directive. This means that the EP and the Council (voting by qualified majority) will need to agree on the text (were it a taxation legislation proposal, the Council would need to reach unanimity).
6th October 2021
9th July 2021