Representatives of the European Parliament and the Council of the European Union were still hoping to reach an agreement on Tuesday 1 June on the proposed directive to increase country-by-country reporting (CBCR) (see EUROPE 12730/12).
According to our information, no real breakthrough had been achieved in the afternoon, and by 7:15 pm negotiations had broken down.
One of the controversial issues is the extent of tax transparency of accounting data for activities that EU companies with annual turnover exceeding €750 million carry out in third countries.
The revised mandate given to the Portuguese Presidency limits the breakdown of data to third countries on the ‘black’ list of non-cooperative jurisdictions for tax purposes and to third countries on the ‘grey’ list of countries that have made certain commitments on tax transparency for more than 3 years (see EUROPE 12726/19).
Parliament initially advocated a breakdown of accounting data for activities in all third countries. But the European Parliament’s chief negotiators, Ibán García del Blanco (S&D, Spain) and Evelyn Regner (S&D, Austria), were ready to give up on this point.
For her part, the negotiator for The Left group, Manon Aubry of France, blasted the Portuguese Presidency’s revised mandate on Twitter, which would require the disaggregation of accounting data for only 44 countries (including the 27 Member States), or fewer than 20% of the world’s jurisdictions.
In the negotiations, the issue of disaggregation is linked to the safeguard clause, which would allow a company concerned to omit certain sensitive accounting data, the disclosure of which would damage its commercial position. On this point, a possible reduction to 4 years of the duration of this clause is under discussion.
On the occasion of the launch of the European Tax Observatory (see other news), Sven Giegold (Greens/EFA, Germany) lamented that some NGOs do not see the positive elements of this potential agreement (see EUROPE 12728/33).
“Of course, we would have preferred global tax disaggregation and not just disaggregation in the EU27 and the countries on the tax haven lists”, he said. Nevertheless, he said that an agreement on such a provision would already be “a step forward, not a step back”. (Original version in French by Marion Fontana)