Europe & US coalitions issue fact-sheets on Public CBCR







Global Alliance for Tax Justice’s regional network members in Europe and United States each published a fact-sheet on Public Country-by-Country Reporting last week.

North American member FACT Coalition (Financial Accountability and Corporate Transparency), a non-partisan alliance of more than 100 state, national, and international organizations issued a fact-sheet titled “Boosting Tax Transparency to Guard Investors, Protect Taxpayers, and Inform Policymakers”.

“The scale of offshore tax avoidance by multinational corporations, introduces FACT, is enormous. It’s estimated that U.S. multinationals, alone, have accumulated $2.6 trillion in untaxed profits booked offshore, on which they owe an estimated $767 billion in unpaid federal taxes. While tax fairness and transparency advocates in the U.S. have raised concerns about the lack of information disclosed about offshore tax practices for years, countries are beginning to take action.

Disclosing more information on where companies book profits, record revenues, and pay taxes would protect taxpayers by discouraging abusive tax avoidance schemes; protect shareholders by providing them with information about the risks associated with their investments; and inform policymakers as Congress considers overhauling the U.S. tax code”.

Presenting “The Problem”, FACT Coalition states:

  • “It is a lot of money
  • And it is growing
  • It is largely hidden
  • The risks are growing
  • Policymakers are left in the dark
  • Secrecy Undermines Accountability and Economic Stability”

“The Solution”, according to FACT, lays in:

  • “Public, country-by-country reporting
  • It is NOT a burden to the multinationals
  • Many companies already disclosure this information publicly
  • Opacity is short-sighted
  • Policymakers are going to act”.

In Europe, Eurodad, Oxfam, Transparency International and EPSU released an updated document on public country-by-country reporting, following the outcome of the vote in the European Parliament during the Maltese Presidency.

In this document titled “From tax secrecy to tax transparency: Introducing public country-by-country reporting (CBCR) that is fit for purpose”, the civil society organisations introduce “On 4 July 2017, the European Parliament adopted its draft report on Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches (‘proposal’). This was widely dubbed as a move to make country-by-country reporting (CBCR) of multinational enterprises public, though concerns remain about a loophole that would allow certain multinationals to keep some of their activities in the dark”. 

“Comprehensively implemented, public CBCR would increase corporate and tax transparency by enabling citizens worldwide to follow the money. It will also contribute to ensuring that taxes are paid where they are due providing adequate revenue for critical public services.

The initial proposal from the European Commission (12 April 2016) did not live up to these expectations. The European Parliament has recently managed to substantially improve the draft legislation and citizens now expect EU member states to amend the initial proposal in the same direction. Without these necessary changes the EU will miss a key opportunity to increase tax transparency in Europe and worldwide”.

Eurodad, Oxfam, Transparency International and EPSU present the state-of-the-art and their recommendations on the “3 key elements that must be improved if the EU is to pass public CBCR legislation that is fit for purpose”:

  • Which countries must companies report on?
  • What should companies report on?
  • Who has to report?

Together with One and ActionAid, they also resumed civil society’s assessment of the European Commission’s legislative proposal on public CBCR in a joint Q&A – available and online – , answering the following questions:

  1. Does the Proposal actually include public country-by-country reporting?
  2. When tax havens are covered as well, does that solve the problem?
  3. Does the EU have legal authority to require MNEs to provide CBC reporting for their activities in third countries?
  4. Does the EU break international laws or agreements by proposing public CBCR?
  5. Are MNEs headquartered both in and outside the EU covered?
  6. Would the Proposal apply to all big Multinationals?
  7. Does the Proposal require the right reporting elements, and if not, what is missing?
  8. Will the reported information cause misunderstandings for the public?
  9. If adopted, will the information be easily compared and screened?
  10. Does the Proposal require the publication of clear data for each EU tax jurisdiction?

FACT Coalition’s factsheet is available  as well as on FACT Coalition’s website.

Eurodad, Oxfam, Transparency International and EPSU’s factsheet is available on Eurodad’s website.

Picture ©Matthew Henry

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