Brussels, 08/07/2015 (Agence Europe) - In a vote on the revision of the shareholders' rights directive, on Wednesday 8 July, the European Parliament took position in favour of rules requiring multinationals to carry out country-by-country reporting (see EUROPE 11328).
“We are sending a clear signal to the Council of the EU ahead of the institutional negotiations”, said Sergio Cofferati (S&D, Italy), whose report was adopted in plenary by a large majority (556 votes in favour, 67 against and 87 abstentions).
The EP takes the view that this tax information is in the public domain, along the lines of the rules already in force for the banking sector. This provision was adopted by a comfortable majority (404 votes in favour, 127 against 174 abstentions). However, a number of states, chiefly France and Germany, want to limit access to these data to the administrations. This is the model decided upon by OECD, whilst the European Commission has initiated a public consultation on the question of total transparency of tax information.
Tax rulings also in the hot seat. “Insisting on country-by-country financial reporting and transparency on tax rulings, which were behind the LuxLeaks scandal, are measures of simple transparency. They do not require the unanimous agreement of the states and are a tool which will be immediately effective against tax evasion and corruption”, said Pascal Durand (Greens/EFA, France).
Incidentally, the legal basis is the reason the EPP group abstained during plenary vote, with the exception of a handful of its members. “I advised my group to abstain on country-by-country reporting, because this is outside the scope of application of the proposal”, confirmed Poland's Tadeusz Zwiefka, spokesperson of the EPP group on legal affairs. He explained that the Commission is carrying out appropriate work into this issue “without putting European businesses at a disadvantage”.
For the ALDE group, the instructions were to vote in favour of country-by-country reporting. It had more of a problem, on the other hand, with various other provisions. “While the Social Democrats, Greens and far-left wanted to use the directive to regulate the salaries of senior management, Liberals and Democrats have fought for a proportionate directive that focuses on delivering full transparency where there is a real benefit for shareholders and other stakeholders, while striking a balance between the protection of personal data and existing EU corporate governance structures”, said Cecilia Wikström of Sweden, the group's shadow rapporteur.
The NGOs applaud. “All eyes are now on the Luxembourg Presidency of the Council of the EU to ensure that this basic transparency measure has the full force of law”, said Carl Dolan, director of Transparency International EU. “Both the OECD and the Commission have claimed that governments can be transparent without sharing any information with the public (…). The Parliament has shown what real transparency looks like”, said Markus Meinzer, Senior Analyst for Tax Justice Network.
The text also gives shareholders their say on directors' salaries and remuneration. (Elodie Lamer)