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EU States Shut Down Plans For Public CbC Reporting

Monday, December 2, 2019

EU member states have been unable to reach an agreement on proposals to release to the public information on multinational enterprises' tax affairs.

The EU's Competitiveness Council met on November 28, 2019, to discuss the latest compromise proposal put forward by the Council presidency. The proposals were rejected by 13 member states, including Cyprus, the Czech Republic, Estonia, Hungary, Ireland, Latvia, Luxembourg, Malta, Slovenia, and Sweden.

Under current rules, multinational groups located in the EU or with operations in the EU with total consolidated revenue of EUR750m or more are required to file country-by-country (CbC) reports. The report must include information for every tax jurisdiction in which the group does business, covering the amount of revenue, profit before tax, income tax paid and accrued, number of employees, stated capital, related earnings, and tangible assets.

The proposal would have required multinationals to "disclose publicly in a specific report the income tax they pay together with other relevant information." Both European and non-European multinationals doing business in the EU would "through their branches have the same reporting obligations."

According to a document on the outcome of the meeting, "there was broad support for enhanced transparency in the business activities of multinational companies in the various member states." However, the Council was unable to "gather sufficient support for the presidency's proposal, in particular as regards the proposed legal basis."

The presidency intends to continue working on the proposal, "reflecting on the best way for taking it forward."