Eurodad partner organisation Tax Research UK has released this new report.
The report written by Richard Murphy the inventor of country-by-country reporting sets out the full reasoning for country-by-country reporting. It debunks many of the arguments that have been made against this approach and attempts which have been made to misrepresent this method of accounting. The report also contains detailed arguments setting out why the alternatives to country-by-country reporting which have been put forward are much less effective.
Not only is there discussesion of the benefits of dissaggregated reporting to investors and tax collectors but also the report argues that country-by-country reporting should be a requirement made in exchange for the benefit of limited liability and points out that companies can often ring fence their liababilities in a national subsidiary yet they don’t have to report for this. The report also debates the negative consequences of limited liability granted to subsidiaries as it currently stands, producing a situation in which a multinational company can transfer with money available can simply cut all responsibility for its debts in one of the countries where it operates. In the case of the banking bailouts of recent years which are still ongoing in many european countries the state ends up paying, having never been aware of the full risk that the subsidiary it hosted exposed it to. The report sets out how country-by-country reporting is one of the few proposed accounting reforms to have been created with macroeconomic as well as micro-economic benefits in mind, and in fact country-by-country reporting could serve to increase growth.
Download the full report: Country-by-country reporting accounting for globalisation locally