The Economics and Legal Affairs Committees of the European Parliament on 12 June 2017 voted to make multinational companies, with an annual net turnover of €750 million and above, publicly report their activities, structures and tax payments on a country-by-country basis. The draft report was approved by 38 votes to 9 votes, with 36 abstentions. The result, if approved by the EU Parliament, would require MNEs to publicly disclose how much tax they pay, and where (disclosure includes taxes paid outside the EU).
MEPs rejected the European Commission’s proposal to exclude non-EU jurisdictions from the legislation – that means MNEs will be required to provide information on their activities for each jurisdiction where they operate, also outside the European Union. The vote concerned amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings [basically, corporations] and branches.
An amendment was however passed that provides nation states with the possibility to grant exclusions for multinationals which would allow them to avoid disclosing information if it is considered to be “commercially sensitive”.
The draft report will now be sent to the European Parliament Plenary for final consideration.
[LTN 110, 14/6/17]