Weak country-by-country reporting proposals won’t fix tax evasion
GUE/NGL MEPs are strongly criticising the Parliament’s report into the disclosure of income tax information by multinationals after the right-wing groups watered down the proposals, thus depriving EU taxpayers billions in lost tax receipts every year.
Civil society, NGOs, tax justice activists and academics have been campaigning for the introduction of country-by-country reporting for companies for well over a decade, so that multinational corporations would have to publicly report their turnover, profits and tax paid in each country in which they operate.
However, the report presented to MEPs at the plenary was woefully inadequate, with GUE/NGL shadow from the Committee on Economic and Monetary Affairs (ECON), Miguel Viegas saying:
“Transparency is the most important weapon we have to fight tax evasion and tax avoidance today. But the proposals amounted to very little because there is a clause that watered down the report so that multinationals can continue to hide economically sensitive information."
“We cannot support that. It was not possible to achieve a consensus in the committee. Compromises should have been made on the basis of the principles which we are elected to uphold,” he reasoned.
GUE/NGL’s shadow from the Committee on Legal Affairs (JURI), Jiří Maštálka, agreed:
“Back in 2013 at the World Social Forum in Tunisia, it was concluded that tax justice is one of the most important steps for poverty eradication and to promote democracy.”
“The Commission had declared that the fight for tax transparency is one of its political priorities but what was presented to us today by right-wing parties is a placebo for the tax ‘diseases’."
“We need a truly effective tool to fight against tax avoidance, corruption and money laundering. We need to guarantee public control over the budgets,” argued the Czech MEP.
Meanwhile, Fabio De Masi, Vice-Chair of the European Parliament’s Committee of Inquiry into Money Laundering, Tax Avoidance and Tax Evasion (PANA), said the threshold proposed for multinational reporting is deeply inadequate:
"According to the OECD, the 750 million euro reporting threshold will exclude around 85 per cent of companies and it deviates from the current EU definition of large undertakings, which is set at 40 million."
"The safeguard clause for commercially sensitive information is as stretchable as chewing gum; it is not temporarily limited and does not include the retroactive publication of the omitted information," argued the German MEP.
Irish MEP and ECON committee substitute Matt Carthy also takes aim at the right-wing groups for siding with the multinationals:
“We need to demand that companies report the full breakdown of their figures in each country, not only in EU member states and countries on a future EU tax blacklist, which we know will be a very small list – just Trinidad and Tobago if it is based on the OECD's list.”
“It’s appalling that liberal and conservative groups have sided with multinationals by introducing the so-called safeguard clause on this global reporting requirement.”
“This is a loophole you could drive a truck through. Make no mistake, its purpose is to allow profit-shifting to tax havens to continue unhindered,” he said.