Press release: European Parliament vote a welcome step towards Multinational Transparency
07 May 2015
PRESS RELEASE: For immediate release
European Parliament vote a welcome step towards Multinational Transparency
Tax Justice campaigners today welcome a vote by the European Parliament’s Legal Affairs Committee for a Shareholders Rights Directive that includes a requirement for multinational corporations to publicly report financial information at a country by country level.
After the LuxLeaks scandal, which exposed hundreds of multinational corporations (MNCs) that had secret tax deals with Luxembourg, there has been a renewed European focus on corporate transparency and tax dodging. Yet it remains hard, sometimes impossible, to find out whether global corporations are shifting profits around the world to dodge taxes.
“On a day when another multinational has made front-page news by booking all its non-US income in Ireland to reduce the taxes it pays in other countries, the Legal Affairs Committee vote is a welcome step towards greater transparency on corporate taxation,” said Eamonn Casey, policy officer at Debt and Development Coalition Ireland.
“Until now, we have had to rely on leaks, whistleblowers, and secret documents to learn if a multinational company is engaging in profit-shifting and tax avoidance. Today’s vote brings a little closer the transparency that Europe, and especially developing countries, need on companies’ secretive financial and tax dealings.”
Public country by country reporting (CBCR), as proposed in the JURI Committee vote, would require these corporations to disclose things like the amount of profit made, taxes paid, revenue generated and number of employees for each country where a subsidiary operates. Right now, MNCs report on their operations in one consolidated global report, without any way of discerning the performance, profits and taxes of any country-specific operations.
“The European Parliament is just reflecting that people in Europe, struggling to cope with financial austerity, are fed up with the secrecy and tricks that allow corporate tax dodging,” said Eamonn Casey. “Companies that are operating in one jurisdiction already report this type of information, so public CBCR for multinational corporations is not only a matter of financial transparency: it also levels the playing field between small and medium enterprises and their multinational competitors.”
The European Parliament vote comes as the European Commission begins an assessment of the benefits of CBCR and has recently called for the exchange between European countries of each other’s tax rulings, which are currently kept secret. The Commission is currently investigating whether Ireland’s special tax arrangements with Apple amount to an unfair benefit to the corporation as well as a significant loss to the Irish exchequer.
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Notes to the Editor:
1. The ALDE group in the European Parliament invoked a rule of procedure at the end of the vote, requesting to send the report to plenary. The European Parliament’s leadership, the Conference of Presidents, will decide whether or not to put it on the agenda.
2. The European Parliament has repeatedly called for greater transparency around the activities of multinational corporations, for instance in the 2014 Tax Report (rapporteur Kaili) that was adopted in March this year and the report on the Fight against Tax Fraud, TaxEvasion and Tax Havens (rapporteur Kleva-Kekuš) of May 2013.
FOR FURTHER INFORMATION PLEASE CONTACT:
Eamonn Casey – Debt & Development Coalition Ireland (DDCI)
+353 1 6174835
