Take action to make multinationals pay their fair share of taxes
The European Commission now has the opportunity to show real commitment to its agenda for corporate transparency and fair taxation. Right now, the Commissioners are discussing a proposal for public country by country reporting for multinational corporations. Eurodad has launched a new website to help you get in touch with the Commissioners and make sure they know now is the time for an ambitious proposal.
Tax justice NGOs all over the world have been calling for public country by country reporting for years, as basic information on where multinationals do business, what they pay in tax, how many employees they have and so on, would be a key tool in the fight against corporate tax avoidance. There are several reasons why the European Union should introduce this simple transparency measure
to allow citizens, both in Europe and in developing countries, access to these figures.
As corporate tax scandals continue to unfold, the European Commission seems to have taken note of the growing public demand for transparency and has announced it will come out with a proposal for public country by country reporting in April. Although this should be good news for tax justice campaigners across the globe, we have yet to see the proposal to know whether it is something to be celebrated, as there are many ways in which it could be watered down.
For example, the OECD model of secret country by country reporting (shared only between tax administrations), which was recently agreed on by the Economic and Financial Affairs Council
, only covers companies with a turnover of more than 750 million euros. This despite the fact that even the OECD’s own estimate is that this would mean only 10-15 % of multinationals have to report. The threshold for reporting in the upcoming Commission proposal thus needs to be much lower. There are also several other issues that need to be taken into consideration to make sure the proposal is fit for purpose
Making sure the Commission puts forward an ambitious proposal that is fit for purpose is step number one. After that, it will be up to the Member States and the European Parliament to agree on the final text. The European Parliament has already put a proposal for public country by country reporting on the table as part of the Shareholders’ Rights Directive, which is currently under negotiation. This proposal covers all large multinational corporations in the EU, and is thus already better than the OECD model. However, the European Commission has insisted on putting their own proposal on the table, rather than negotiating the Parliament’s text. Surely this should mean that the European Commission wants to present something even better?