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BackThe negotiations on country-by-country reporting (CbCR) and the associated report by MEPs Evelyn Regner and Hugues Bayet (S&D) are continuing. This week, the European Parliament debated the tabled amendment proposals. The specific threshold values, the extent of disclosure requirements, the contents of the reports and the accessibility are still being heavily debated.
Even though the Regner-Bayet Report on CbCR had been kept quite short, 238 amendments have been submitted. The minimum net turnover of companies, which defines those companies that will have to disclose their taxes and profits, is still under discussion. The proposal by the Commission is based on the OECD-BEPS Guidelines and provides for a threshold of 750 million Euro. Both EPP and ENF welcomed this threshold as a new international standard. In contrast, the Regner-Bayet Report suggests applying the 40 million Euro threshold, which already exists in the EU Accounting Directive using a legal definition excluding small and medium enterprises. This significantly lower threshold could ensure that 80 % of all relevant companies are covered by the Directive, as Pascal Durand from the Greens/EFA points out. A threshold of 750 million, however, would only affect 10 %. In order to retain Inner-European coherence no new thresholds - such as the 750 million one - should be adopted. Small and medium-sized companies that pay their taxes should also be able to benefit from more transparency and fair competition.
Furthermore, it is also debated where these companies have to disclose their taxes and profits. The original Commission report required a reporting for each Member State and each previously classified tax haven, in which the company or a subsidiary was active. However, the Regner-Bayet Report wants to avoid the creation of new loopholes and demands disaggregated reporting in all countries in which the company is active, no exceptions made. A demand, which is also supported by the European Parliament's Committee on Development (DEVE) that can contribute to tax justice at a global level.
Lastly, it is also debated who should have access to the disclosed data. Similar to some Parliamentary groups, the Commission is in favour of forwarding all relevant information to the competent authorities. After all, it was important to avoid competition distortions because of publicly available information. This view is not shared by the Regner-Bayet Report, the GUE/NGL and the Greens/EFA: only disclosed data, which is available to all, creates new transparency, a save environment for investment and fair competition. The recently published Oxfam Report that is based on data derived from obligatory country-by-country reporting from European banks shows the scale of tax revenue lost through tax avoidance strategies and that disclosure obligations are not related to competition losses.
On 30 May, the Committee on Economic and Monetary Affairs and the Committee on Legal Affairs will jointly vote on the proposal. However, until then and beyond the negotiations will remain exciting. From an AK point of view it has to be seen to which extent the Regner-Bayet Report will be accepted by the subcommittee, the parliamentary plenum and finally the Council of the EU. Only by the means of these strict disclosure requirements for a larger number of companies, country-by-country reporting, in combination with other necessary measures, has the ability to raise a significant barrier for tax avoidance practices of large companies. In the meantime it is still possible to continue the support for the No to tax havens! campaign, which has been co-organised by the AK.
Further information:
AK EUROPA: Shedding more light on the tax avoidance practices of multinational companies
AK EUROPA: Putting an end to tax avoidance: we also want to know who does not pay their taxes!
AK EUROPA Position Paper on Country-by-Country-Reporting (CbCR)
AK EUROPA: EU Directives against tax avoidance in need of improvement
Oxfam: Opening the vaults: The use of tax havens by Europe's biggest banks