On Wednesday 9 June, the Member States’ ambassadors to the European Union (Coreper) validated the agreement reached a few days earlier between the Portuguese Presidency of the Council of the EU and the European Parliament negotiators on the proposal for a directive aimed at increasing public country-by-country reporting (CBCR) (see EUROPE 12732/2).
The overall compromise reached with Parliament is “balanced” and in line with the revised mandate given to it at the end of May (see EUROPE 12727/22), explains the Portuguese Presidency in a note submitted to Coreper.
Under the agreement, companies operating in the EU with an annual turnover of more than €750 million will have to disclose country-specific tax information, such as the company’s turnover and net profit, the number of employees, income tax paid, and the amount of accumulated profit. This information will have to be disclosed for each EU Member State on an annual basis.
With regard to the activities of European companies in third countries, the Presidency stresses that Parliament has taken a major step towards the Council of the EU. The co-legislators decided that the obligation to communicate this information will apply to third countries on the black list of non-cooperative jurisdictions from a tax point of view and to third countries that have been on the ‘grey’ list of countries that have made certain commitments towards tax transparency for at least 2 years.
According to the Presidency, the EU Council’s concession of “at least 2 years” (instead of the 3 years sought) should “not change the fact that the text now provides for greater stability” and is an “acceptable change”.
Lisbon also welcomes in the note the fact that it has managed to maintain the 5-year safeguard clause allowing a company concerned to omit certain sensitive accounting data, the disclosure of which would be detrimental to its commercial position, pointing out that this was an important issue for some delegations.
It acknowledges that it conceded to Parliament a shorter revision clause, extended to 4 years instead of 5 years, and a shorter transposition period of 18 months (compared to 24 months), given the limited number of elements it could concede to the European Parliament during the negotiations.
In the European Parliament, the Committee on Economic and Monetary Affairs (ECON) and the Committee on Legal Affairs (JURI) are expected to vote on the agreement next week.
See the text of the agreement: https://bit.ly/3pJ2zrS and the updated four-column table: https://bit.ly/3xeusKZ (Original version in French by Marion Fontana)