Country by Country Reporting must be public

The negotiations in the EU Council are in danger of losing the thread again

The negotiations on Country by Country Reporting in the Council were once again deferred and an agreement is not in sight. If governments would indeed take the fight against the tax tricks by large corporations seriously, they would realise that implanting public Country by Country Reporting is urgently required. This concerns the justified interest of the public to know how multinational corporations report their profits and where they are actually economically active. Public Country by Country Reporting has already been implemented for sectors of the raw material industry and for banks. Hence, there is no reason why this should not work for all sectors.

We therefore urge the ministers to campaign for public Country by Country Reporting in the upcoming trilogue negotiations of the EU Parliament with EU Finance Ministers.
Austria, as the future holder of the Council Presidency, should strive to lead the negotiations in the Council to a joint position in advance to enable the final negotiations to be finalised as soon as possible.

The following key points are crucial:

  • Public reporting obligations should apply to corporations in all sectors and not only to those operating in the raw material industry and to banks.
  • We think that the turnover threshold of more than EUR 750 million, from which Country by Country Reporting would apply to corporate groups, is too high. Significantly smaller corporate groups also exploit any available room to manoeuvre to avoid tax. In our opinion, a starting point would be to set the threshold value analogue the accounting limit of the EU Accounting Directive. In accordance with this Directive, companies with a minimum turnover of EUR 40 Million are regarded as large undertakings.
  • Companies, subsidiaries or branches in third countries shall be included in the public reporting obligation. An aggregated presentation, as proposed by the EU Commission, is to be rejected. Genuine transparency is only possible if all countries report on an individual basis.
  • The same applies to various clauses, which might limit or delay the reporting obligation. Neither the EU Commission nor the EU Parliament intend to go down this route.
  • The proposal of the EU Parliament contains a clear reporting structure. We support this proposal of uniform reporting, as it guarantees comparability with a minimum of cost and effort.
  • Public Country by Country Reporting for corporations strengthens the confidence of the population in the government and politics in general. More information and participating in consultations represent an additional contribution to realise the stronger involvement of the population, as announced by the government.
  • Within the meaning of fair corporate taxation, the issue also concerns the right of small and medium enterprises to fair conditions of competition.