Portugal’s EU Presidency on Thursday (25 February) won broad support form EU countries to move forward with the European public country-by-country reporting directive, which aims to make multinationals publish information on where they make profits and pay taxes.
“I am happy to say that we got great support today, by a large majority of member states,” said Portugal’s minister of economy and digital transition, Pedro Siza Vieira.
Speaking at a press conference after an informal meeting of industry ministers, the minister indicated that a negotiation mandate on the ‘Public country-by-country reporting’ directive would only be formalised in the coming days.
“We still have a few steps to take in the legislative process, but we can take these steps quickly,” Siza Vieira said, expressing hope that an agreement can be found before June in “trialogue” talks between the EU Council of Ministers, the European Parliament and the European Commission.
Once approved, the directive will oblige large publicly-listed companies operating in Europe “to “publish information on how much tax they pay and where they pay it,” Siza Vieira said.
At the press conference, the EU’s internal market commissioner Thierry Breton said that the EU was now very close to closing a deal on the directive, which has been in the making for years.
“Thanks to the efforts of the Portuguese presidency, we are confident that we will be able to move forward,” Breton said, saying the achievement was important.
“The establishment of common rules on corporate tax transparency will also serve the general economic interest by providing equivalent safeguards throughout the Union for the protection of investors, creditors and other third parties in general, thereby helping to restore confidence in the fairness of national tax systems,” the document reads.
The European Commission proposal, made in 2016, creates a new directive that will require large multinational companies to publish country-by-country information on where they make their profits and where they pay taxes.
These transparency rules will apply to companies which have activities in the EU single market, have a permanent presence in the EU and have annual revenues of more than €750 million annually.
According to Brussels figures, corporate tax avoidance in Europe costs EU countries an estimated €50-70 billion a year.
Moscovici: Commission to discuss feasibility of country by country tax reporting
Speaking on Thursday (28 January), Tax Commissioner Pierre Moscovici said he was in favour of public country by country reporting as long as the Commission’s risk assement concludes that it won’t damage competitiveness or hinder investment.