Tax To Go gives a snapshot of the latest political and legislative developments on taxation policy at the EU level. In this week’s issue we feature (1) MEPs adopt position on country-by-country reporting (2) EU should ‘seriously consider’ blacklisting US, Greens say (3) Parliament postpones inquiry committee on Panama Papers (4) #PanamaPapers – which MEPs are the most vocal on the issue? – and much more
In less than a year, the European Commission has already presented three action plans on corporate taxation and one on VAT. Not to mention the tax probes and the special/inquiry committees of the European Parliament. Yet there’s more to come – and these developments have major implications for all businesses in the EU.
MEPs adopt position on country-by-country reporting
More than two months after EU member states in the Council reached an agreement on the Commission’s proposal on country-by-country reporting (CBCR) to tax authorities, the Parliament finally adopted its opinion on 12 May.
The new rules will oblige multinationals with total consolidated annual revenues above €750 million to file a country-by-country report in the EU member state in which the ultimate parent entity of the group is resident for tax purposes.
Members of the European Parliament (MEPs) want the Commission to have full access to information exchanged among member state tax authorities, largely to better assess whether tax practices comply with EU state aid rules. It is no surprise that member states are not keen on the idea – plus, legal constraints would make it hard to implement anyway.
Just as in October 2015 with the directive requiring EU countries to exchange information on cross-border tax rulings, MEPs resented the fact that member states did not wait for the Parliament to make its recommendations before agreeing on the CBCR text in the Council. As is often the case on direct taxation proposals, the Parliament’s role was confined to the consultation procedure here – the Council is not bound by MEPs’ position.
The Council will now formally endorse the proposal in the coming days.
Legislative work is just starting on a sister proposal on public CBCR – this time under the co-decision procedure (same weight for Council and Parliament). We can expect MEPs, led by rapporteur Evelyn Regner (S&D, Austria), to make the most of their legislative power to impose their views – and that forthcoming trilogue negotiations will be arduous.