Country-By-Country Reporting / Corporate tax transparency
On 12 April 2016, the EC issued its proposal to amend the Accounting Directive (Directive 2013/34/EU). When in force multinationals with consolidated annual revenues of €750 million or more are obliged to publish CbC information on their websites for its operations in EU member states and identified tax havens.
During a April 2016 meeting to discuss the EC Anti-Tax Avoidance Package, several EU finance ministers said that the EC proposals should not go beyond the OECD BEPS project recommendations.
With the rules on country-by-country reporting, the EU has created a framework where businesses in the extractive and logging industries have to publish their payments to governments relating to the exploitation of natural resources. This will assist populations of resource-rich countries to hold their governments accountable for these proceeds.
In addition, a country-by-country reporting is also required from EU credit institutions (banks). This will ensure that trust in the financial sector is regained.
Requires banks and investment firms to publicly disclose certain information for every country where they operate (type of activities, turnover, full-time employees, profit/loss before tax, tax paid, public subsidies received).
On 12 April 2016, the Commission adopted a proposal for a Directive which imposes on EU and non-EU multinational groups the publication of a yearly report on the profit and tax paid and other information (Accounting Directive separate initiative from OECD).
Disclose reports on income tax information, including a breakdown of profits, revenues, taxes and employees reported separately for each Member State. Such reporting obligations will when the proposal comes into force be applicable for EU and non-EU MNEs that do business in the European Union.
Executive Summary (See above)
Synopsis report on the consultation activities
Text of the proposal
Related GITM articles
- Examples of public Fiscal Transparency statements
- The Tax Transparency Benchmark 2015
- BEPS 2015 Final Reports
- EU - Public consultation on further corporate tax transparency
- CbC reporting / tax transparency: Accounting Directive
- Improving large business compliance
- Tax administration: large businesses transparency strategy
- Spreadsheets and Compliance
- Tax Strategic Plan
- Tax Control Framework