Europe and tax havens around the world, there is still a lack of transparency. From David Cameron’s dad to Petro Poroscenko and Lionel Messi, many individuals and companies have taken advantages of tax havens. One week after the Panama Paper leak came out, the European Commission will present tomorrow a legislative proposal on Country by Country Reporting directive (CBCR) . At the end of last week, just after the Panama scandal, the EU Commission declared that it will introduce some amendments to the proposal draft. While the original draft considered the obligation to report the turnover (also profits and number of employees) only for business companies with their headquarters inside the EU, so only in the 28 member states. So, the obligation to publish their reports couldn’t be applicable to multinational corporations that do business in Europe but have their holdings in other countries. If this proposal draft will be confirmed steps on the fiscal transparency seem to be very few. But from the last declarations from EU Commission, and from what anticipated in a tweet by Agence Europe it seems that the proposal is going to be amended in the last hours in the sense that all the companies are obliged to publish their reports even if their holdings are outside Europe.
Country by Country Reporting (draft proposal by EU Commission)
The companies obliged to publish their reports could be the ones that register a turnover of more than 750 million of euro, while the EU Parliament in its proposal suggested the limit of 40 million of euro. During the last weeks Transparency International expressed its concern about the Commission proposal : given the high limit for the turnover, according to OECD estimates, only about 10-15% of the multinational corporations could be included in the obligation to publish their reports only about 10-15% . That means that only 1053 companies in Europe would be subjected to this law, approximately the 0,004% of all the companies registered in EU. Without considering the fact that multinational of smaller sizes also engage in questionable tax practices.
Background
The EU Parliament voted last July in favor of the Country by Country Reporting directive that is still stuck in the Council: member states oppose to the proposal voted in the Parliament because they affirm there is not an evaluation of impact of the possible consequences for companies after this new law will become executive.
Indeed last summer the EU Commission organized a public consultation “The problem of this proposal is that , if it is not going to be amended, it will consider only the report of the turnover of companies inside the EU: if companies have business outside EU they would declare them in just one declaration of their business in the EU, without taking into account their business and taxes they should pay in extra-EU countries. In that case we could not talk about a Country by Country reporting directive, because it would consider only the 28 member states” Elena Gaita of Transparency International said. We are waiting for last hours and last minutes amendments to the proposal, to make an evaluation of the entire proposal.
There are two different kind of scandals that involve individuals and companies: on one hand tax evasion , as reported in the Panama Leaks, with front man companies, on the other hand the tax avoidance that means the creation of multinational holdings in countries where companies find an agreement for a taxation of about 1% , sometimes even less, even if they do not have business in those countries. In both cases the common point is: individuals and companies are taking advantages of tax havens.
@IreneGiuntella
Europe and tax havens around the world, there is still a lack of transparency. From David Cameron’s dad to Petro Poroscenko and Lionel Messi, many individuals and companies have taken advantages of tax havens. One week after the Panama Paper leak came out, the European Commission will present tomorrow a legislative proposal on Country by Country Reporting directive (CBCR) . At the end of last week, just after the Panama scandal, the EU Commission declared that it will introduce some amendments to the proposal draft. While the original draft considered the obligation to report the turnover (also profits and number of employees) only for business companies with their headquarters inside the EU, so only in the 28 member states. So, the obligation to publish their reports couldn’t be applicable to multinational corporations that do business in Europe but have their holdings in other countries. If this proposal draft will be confirmed steps on the fiscal transparency seem to be very few. But from the last declarations from EU Commission, and from what anticipated in a tweet by Agence Europe it seems that the proposal is going to be amended in the last hours in the sense that all the companies are obliged to publish their reports even if their holdings are outside Europe.
The companies obliged to publish their reports could be the ones that register a turnover of more than 750 million of euro, while the EU Parliament in its proposal suggested the limit of 40 million of euro. During the last weeks Transparency International expressed its concern about the Commission proposal : given the high limit for the turnover, according to OECD estimates, only about 10-15% of the multinational corporations could be included in the obligation to publish their reports only about 10-15% . That means that only 1053 companies in Europe would be subjected to this law, approximately the 0,004% of all the companies registered in EU. Without considering the fact that multinational of smaller sizes also engage in questionable tax practices.
