Brussels, 12/01/2016 (Agence Europe) -The European Commission's impact study into country-by-country reporting by companies in the framework of the measures being considered by the European Commission to fight tax optimisation will also determine whether these will go “further (than the OECD: Ed) as regards publicity and whether we will set in place a labelling system; the Commission is by no means ruling this out”, the Commissioner for Taxation, Pierre Moscovici, said on Monday 11 January, at a joint hearing of the economic committee of the EP (ECON) and the special committee TAXE II. The own-initiative legislative report of the ECON committee calls for a 'fair tax payer' label, which will be awarded to businesses which fully discharge their tax obligations.
The European Commission will “look into a number of options in terms of transparency towards the public. The central issue is: how, and to what extent, should companies make their information public?”, Moscovici explained, having been asked by the MEPs several times what he is planning for this reporting. The ECON committee is in favour of both country-by-country reporting and a labelling system. The impact assessment will therefore look into the possibility of introducing a labelling system as one of the options.
A number of observers in support of public reporting (whereas the OECD provides for reporting to the tax administrations alone) fear that on 8 March, the Commission will decide to propose that only certain information is made public and that businesses that opt to go further will be rewarded by the 'fair tax payer' label.
Several members of the European Parliament, such as Germany's Fabio De Masi (GUE/NGL) and Emmanuel Maurel of France (S&D), asked the Commissioner about the fact that some people see a conflict between transparency and competitiveness. Moscovici said himself that he did not necessarily see that there was any such conflict, but does not wish to win over his colleagues at the Commission with an “ideological approach”.
In any event, the Commission has already pledged a “minimum pillar” on reporting for 27 January, in other words transposing the OECD recommendation into EU legislation. One source said that it would probably be a matter of a further amendment to the directive on administrative cooperation, to include the exchange of information between tax administrations on accounting data submitted to them by companies in the framework of this country-by-country reporting. There could also be recommendations to harmonise the information which businesses must submit to the administrations.
Portuguese MEP Elisa Ferreira (S&D) also said that she had seen what the Council broadly supports regarding the transposition of the OECD 'BEPS' action plan passing into European legislation and wondered whether the Commission would feel free to make its own proposals. The Council has worked on the 'BEPS' points of the current proposal for a common consolidated corporate tax base (CCCTB). Over at the Council, it is said that the Commission should take inspiration broadly from the work of the member states.
Pierre Moscovici has pledged to go further than the OECD. In the light of the Council's text, the NGO Oxfam has furthermore written to the Commission to call for stronger rules on foreign-controlled companies. EUROPE will return to this. (Original version in French by Elodie Lamer)