I have already mentioned the technical amendments to the European Commission's country-by-country reporting proposals put forward in the EU parliament. These are important, and all steps in the right direction. But I also welcome the language that the rapporteurs also propose be used to justify these changes. They do, for example, make very clear that country-by-country reporting is not some mere technical issue. It is a proposal with consequences, as is clear when they suggest that the following wording be added to the recitals (justifications) for action:
A fair and effective corporate taxation system should become the cornerstone of the single market and a coordinated and harmonised approach to the implementation of national tax systems is vital to guarantee the proper functioning of the single market and the success of the capital markets union, and would contribute to prevent tax avoidance and profit shifting.
They also say:
Tax evasion and tax avoidance represent a significant loss of revenue for Member States, which reduces their ability to invest in actions to promote employment, combat poverty and develop effective health systems for all.
They are also adamant that resources must be provided to make sure CBCR works, saying:
Member States should ensure that an adequate level of human, technical and financial resources are dedicated within tax administrations to the automatic exchange of information, to data processing and to the fight against tax fraud and tax avoidance.
In the process they shatter the myth that country-by-country reporting is tax data, saying:
Trade unions and employees of multinational undertakings should be regularly and duly informed of the situation of the undertaking, including the number of employees employed on a full-time equivalent basis, the amount of profit made and of income tax paid, and the objectives and future investment plan of the undertaking
And they are unambiguous that this data must be readily accessible, noting:
The report on income tax information shall be published in a common template available in an open data format and made accessible to the public on the website of the undertaking on the date of its publication in at least one of the official languages of the Union. On the same date, the undertaking shall also file the report in a public registry managed by the European Commission.
What is more they make clear limitations on the geographic scope of CBCR make no sense, saying in their own explanatory notes:
Yours rapporteurs consider that it would be inappropriate to limit the scope of this directive to information related to EU Member States and tax havens and, therefore, even if, in principle, they would not be against the idea of an EU blacklist of tax havens established on the basis of clear criteria, they propose that multinational corporations should provide information on their activities for each jurisdiction where they operate, also outside the European Union. Public disclosure of such information is not a sanction for non-cooperative jurisdictions but rather a prerequisite for those operating in a well-functioning single market.
With a view to enhancing public scrutiny and global corporate transparency, your rapporteurs consider that multinational corporations should disclose relevant information for all countries worldwide in which they operate so that taxes are paid where the profits are actually generated. Your rapporteurs’ call for non-aggregated data to be disclosed is in line with the EU’s policy coherence for development as it aims at promoting tax compliance and at providing developing countries with effective help in gaining access to their tax revenues.
The EU parliament's rapporteurs clearly understand CBCR. I hope the parliament supports them. I hope the Commission is listening.