Sven Giegold

Council approves public Country-by-Country Reporting: new era of tax transparency

Just now, on September 28, the Council approved the outcome of negotiations between member states, the European Parliament and the European Commission on public country-by-country reporting (“trilogue outcome”). Sweden and Cyprus voted against, the Czech Republic, Ireland, Luxembourg and Malta abstained, which is generally seen as a rejection. They are now hinting at an appeal to the ECJ against the legal base of the directive. With the Council’s approval of the draft directive, all that remains is the formal approval by the European Parliament, which is scheduled for one of the two plenary sessions in November. The approval of the European Parliament is considered to be a mere formality.

18 months after the directive comes into force, companies operating in Europe with a total consolidated turnover of more than €750 million in the last two consecutive financial years will have to disclose relevant tax information by country. This is expected to be the case by mid-2023.

Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group in the European Parliament, comments:

“This is a milestone for greater tax justice in Europe. Now we are past the last major hurdle to ensure greater tax transparency by large companies. Public country-by-country reporting marks the beginning of a new era of tax transparency. The instrument is an effective tool against tax dumping. Public country-by-country reporting will reveal how great the damage to the public purse caused by tax dumping really is. The days of intra-European tax havens being able to drain tax revenues from their EU partners are numbered. After years of resistance, the German government has now finally agreed to this legislative project, too.

I have long personally advocated for public country-by-country reporting by large companies. If large companies have to disclose their profits and taxes paid per country where they do business, tax dumping will become visible for all to see every year. As a result, aggressive tax avoidance leads to regular reputational damage for individual companies. It also highlights the lack of solidarity in the tax policies of individual EU member states. This compromise is just the beginning, as the Council has refused to agree to the global disaggregation of relevant tax data. The U.S. is currently working on a law that would require U.S. companies registered with the Securities and Exchange Commission to implement public country-by-country reporting – with the worldwide disaggregation of tax-relevant data per country of operation. As with minimum taxation, the USA is once again one step ahead of Europe.

It is only a matter of time before all tax-relevant information of large companies will become public worldwide. Those who fear competitive disadvantages for their companies should work to ensure that country-by-country reporting in the OECD’s international framework becomes public for all. Investors, who collectively manage $2.9 trillion, are also calling for public country-by-country reporting. To be efficient, markets need information. In the wake of the Corona crisis and in light of the necessary investments in climate mitigation, infrastructure and education, tax competition must be called out for what it is: tax dumping puts the cohesion in our societies at risk, because our solidarities are built on solidarity.

In the run-up to the Council vote, unfortunately, eight Member States have again expressed concerns about the legal basis of the directive. I strongly advise European tax havens such as Ireland and Luxembourg not to take legal action against the legal basis of the directive. This would send a fatal signal at a time when tax cooperation is more important than ever to jointly master the challenges ahead.”



The European Parliament had already defined its negotiating position on country-by-country tax reporting in July 2017, and after more than four years of tough wrangling in the Council, final adoption of the legislative text is now imminent. The German government had long blocked this project in the Council.

Breakthrough on public country-by-country reporting in the Council on February 25:

EU agreement on public country-by-country reporting: a milestone for greater tax justice! on June 1:

About 80 percent of the tax revenues lost from large corporations in the EU are due to European tax havens, thus most of the tax revenues currently lost in the EU are covered by the directive: “About 80% of the profits shifted out of the European Union are shifted to the E.U. tax havens, primarily Ireland, Luxembourg, and the Netherlands, while the profits shifted out of the United States are primarily shifted to the non-E.U. havens.”  pp. 30-31

Investors urge Financial Accounting Standards Board to prioritize public country-specific tax reporting:

Voting Behaviour of Member States in the Council.

Press release from the Council.

Previous statements by 8 Member States on the legal basis of the Directive:

Category: Democracy & lobby, Economy & Finance

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