The European Parliament has today backed proposals for public country-by-country reporting of financial information, a major tool in the fight for tax justice. Public country-by-country reporting would require large multinationals operating within the EU to publish financial information for all territories in which they operate, including those out-with the EU. The Greens/EFA group has supported this idea for years, and previously attempted to include it in the Shareholder Rights Directive. Trialogue negotiations are expected to commence after the summer recess in September.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group, comments:
“After years of campaigning, this is a big victory for all those that have worked hard for tax justice. The case for greater tax transparency in answerable. If the EU is serious about cracking down on hidden and unscrupulous tax deals, it needs to end the secrecy that allows these practices to flourish. Public country-by-country reporting will make it much harder for multinational corporations to shop around for the lowest possible tax rate, and help bring illegal activity to light. That means more money for governments to invest in their people, and a greater sense of fairness in how we tax profits across the EU. With his blockage in the Council, the German Finance Minister Wolfgang Schäuble is helping big corporations to hide their harmful tax practices from the public. The German grand coalition thus collaborates with Malta, Ireland, Luxembourg and other Member States to reject public tax transparency.
Big corporations have already shown themselves to be highly adept at seeking out loopholes. It is a shame that so many MEPs chose today to make their life that much easier. The so-called safeguard clause could lead to companies being able to keep their financial arrangements in the dark, stopping country-by-country reporting from fulfilling its promise.”
A majority of MEPs from EPP, ECR and ALDE today defended their proposal to introduce a ‘safeguard clause’ which gives companies the opportunity to apply each year for an exemption from reporting on the grounds of “commercial sensitivity”. Greens/EFA supported amendments today which would have limited the number of consecutive years in which companies could apply for this exemption, and introduced a need for publication of backdated reports after the exemption expired. However, these amendments were not adopted so that the exemption will be renewable each year. Backward reporting will be done as average information only and not year-by-year.