The French employers’ group, Mouvement des Entreprises de France (MEDEF), is greatly concerned at the European Commission’s proposal to introduce public country-by-country reporting (CbCR) requirements, but has given up on repeating the well-known comments about jeopardising competitiveness. MEDEF has decided to submit tangible examples to MEPs to demonstrate the scale of the risks run by companies.
In a document submitted to MEPs and seen by this newsletter, MEDEF highlights ‘unfair competition (for industrial and commercial sectors): foreign groups having access to sensitive data.’ CbCR ‘showing a sudden increase in employees in a given territory, or costs in a country where there was no previous activity would lead competition to assess a potential penetration in a EU market, well ahead of official announcements. Another example would be if a group has only one entity in a country: by looking at the turnover, competitors will have a clearer vision of the prices and therefore of the margin realised. The same difficulty arises when a group only has only one client in that country. The CbCR will lead him to the renegotiation of a lower rate knowing the margin of the supplier,’ explains MEDEF.
MEDEF then puts forward an argument that is doing the rounds among European decision-makers – loss of competitiveness vis-à-vis the EU’s main economic partners. It argues that the US Congress already has doubts about CbCR.
Finally, MEDEF highlights ‘loss of taxable basis within the EU: as information will be detailed for EU-based companies (breakdown per country, Ed.) and aggregated for non-EU based companies, all third countries will redirect their investment using holding companies based outside the EU and will limit their investment and activities in the EU to the minimum required to run their local business.
MEDEF ends its document with four concrete examples of situations where businesses would be harmed by public reporting of country-by-country tax information.
The employers’ organisation will have the opportunity to express its views to MEPs on Monday 24 April. It has invited MEPs to attend an informal discussion about CbCR with French companies Danone, Renault and L’Oréal.
The shadow rapporteur for the EPP group, Dariusz Rosati (Poland), is organising a conference on Wednesday 26 April with auditors PwC (whose data was stolen and published by Luxleaks) on the effect of publicising reporting data.
Several sources say the ALDE group at the European Parliament refused to allow Oxfam to come and submit its report on European banks and the profits they make in tax havens, a report compiled using public reporting information already available for banks.
Corporate access to the Parliament’s political groups ‘raises concerns’ explained Aurore Chardonnet of Oxfam to this newsletter, wishing charities had ‘the same opportunities’ for discussions about public reporting requirements. (Original version in French by Élodie Lamer)