BNA Bloomberg has reported that:
The European Union risks undermining the success of a global tax reporting regime if it begins requiring multinational companies to publicly release annual statements, an OECD official warned.
As was also reported:
Country-by-country reporting is the most widely adopted element of the OECD’s efforts to stop multinational tax avoidance.
Between 40 and 45 Organization for Economic Cooperation and Development members are set to begin country-by-country reporting in June, Achim Pross, head of the OECD International Cooperation and Tax Administration Division, said April 9.
Precisely because this information is now known to be available, and precisely because politicians are persuaded that this was never meant to be tax data (which I can confirm, given I created the idea in January 2003), the European Commission proposed in 2016 legislation to make all multinational companies doing business in the EU with a €750m annual turnover provide financial statements that include public country-by-country reporting. But the OECD objects. Pross said earlier this week that
Countries outside of the EU are very much opposed to the EU plan for public country-by-country reporting. There are a number of concerns. These involve double taxation, especially in countries like China and India where western countries are required to undertake joint ventures. There are also concerns among countries that public data could be used to undercut competitors.
I respect the OECD, and think they have done good work on this issue, but have to say that they have simply got this wrong. First, the EU CBCR data will not require country data for China, India or anywhere else outside the EU barring a select list of tax havens (unfortunately). In that case for these places to object is totally inappropriate. And second, the OECD really should remember that maybe 97% of the world's companies already do CBCR, precisely because they only trade in one country. All that CBCR does is create a level playing field for them when compared to multinational corporations, who usually hold the upper hand in almost every way at present.
The OECD has no right to interfere in accounting issues.
Nor should it be demanding privilege for large companies.
And making up claims that double tax could result when CBCR does not, and is never intended to, create a tax base is absurd.
What I would suggest is that the OECD might instead like to get its own CBCR accounting right, an issue I discussed here. But for now the polite message the EU should be sending to the OECD is 'leave accounting to us": it's none of your business'.