Brussels, 09/06/2016 (Agence Europe) - European insurers were not bowled over by the impact assessment carried out by the Commission to support its proposal for public country-by-country reporting, on 12 April, by means of amendments to the directive on accounting standards.
Readers may recall that this proposal is the public counterpart of the OECD's country-by-country reporting, which obliges major multinationals to disclose certain accounting data, such as turnover and tax paid, to the authorities for each country in which they do business. This standard was translated into European law by means of amendments to the directive on administrative cooperation.
Insurance Europe initially questioned the benefits of this public initiative. The insurance industry takes the view that not only will this not help the fight against aggressive tax planning; it could also undermine the EU's competitiveness. The proposal, Insurance Europe concludes, undermines the objectives of the multilateral agreement on the automatic exchange of country-by-country reports between the national tax authorities. The OECD shared this concern.
The insurance sector then announced its issues with specific articles of the proposal. The insurers take the view that the content of the information elements required in the public reporting should be the same as that of the reporting to the tax administrations. Insurance Europe is also calling for the article requiring businesses to provide a global narrative to explain differences between the levels of tax due and tax paid to be deleted. The OECD does not provide for this requirement and it increases the burden on business, according to Insurance Europe. Then, the directive requires an annual publication of the country-by-country reports (within 12 months of the end of the tax year). The directive on administrative cooperation, on the other hand, allows 15 months. Insurance Europe therefore calls for the two texts to be brought into line.
The insurance industry also seeks clarifications regarding the fact that the work of an independent auditor will be limited to verifying that the reports have been published and include no examination of their content.
Lastly, Insurance Europe takes the view that businesses should be allowed to retain certain information if they have reasonable grounds to believe that disclosing it could have a material negative impact on their competitiveness. A similar clause exists in the most recent revised version of the directive for non-financial reporting, the insurers point out. (Original version in French by Elodie Lamer)