Eurodad responds to leaked European Commission draft proposal for public country by country reporting
This week, details of the European Commission's much anticipated proposal for public country by country reporting were leaked to some media outlets.
Campaigners are warning that currently the draft proposal is meaningless and should not be called public country by country reporting as it fails to deliver transparency or end tax dodging. But the European Commission still has time to make sure the final proposal is fit for purpose.
According to the draft legislation, multinational corporations would only have to report their financial activities on a country by country basis within the EU, while data from outside the Union would be published as a lump figure. The legislation would also only cover companies with a minimum turnover of more than €750 million per year, excluding the vast majority of firms.
Tove Maria Ryding, tax justice coordinator at Eurodad, said:
"A proposal that only requires multinational corporations to report on what they do in the EU would be meaningless. It would mean they could still hide their profits and avoid taxes as long as they use tax havens outside the EU. It would also be very problematic if the European Commission decides it should only apply to companies with a minimum turnover of €750 million per year. This would mean that 85-90% of the world’s multinational corporations would not have to report anything at all. Put simply, it would not create real transparency and it would definitely not stop corporate tax dodging.
"We’re happy that the European Commission has not made a final decision yet. That means it’s still not too late for them to come to their senses and produce a proposal that actually allows the public to see what multinational corporations pay in taxes.
"The EU has already introduced a system for public country by country reporting for banks, and this system works well. So it’s a mystery to us why the European Commission is so reluctant to introduce this for other companies too.
"According to conservative estimates, the EU is losing €50-70 billion per year because multinational corporations are not paying their taxes. Hopefully, the European Commission will soon start to take this problem seriously and propose real solutions."
The European Commission is due to officially announce the final proposal on April 12th. ENDS
To request an interview please contact Julia Ravenscroft, Communications Manager at the European Network on Debt and Development (Eurodad) on email@example.com or +32 2 893 0854.