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Parliament, led by the S&D Group, closes political deal with EU governments on pioneering financial transparency rules

Date

02 Jun 2021

Sections

Euro & Finance

This evening, the European Parliament and EU governments reached an agreement on public country-by-country reporting (pCBCR), which will oblige big multinationals to publicly disclose where they make their profits and where they pay their taxes. This political deal also includes the obligation for companies to publish how many full-time employees they have, their turnover and taxes paid, as well as all profits and losses they have in each country they operate in, inside the European Union and in tax havens. The Portuguese Presidency managed to break the five-year deadlock in the Council, thereby opening the way for an agreement. As part of our tax justice campaign, the Socialists and Democrats have led the drive for public country-by-country-reporting for the past five years. S&D MEPs and Parliament negotiators Evelyn Regner and Ibán García del Blanco could finally close a successful deal on meaningful financial transparency, the first of its kind globally that will make currently undisclosed information publicly available.

Evelyn Regner, S&D MEP and Parliament negotiator on pCBCR, said:

“Tonight’s agreement between the European Parliament and EU governments lays the foundation for more tax justice, and this will finally oblige large multinational companies to publicly disclose where they make their profits and where they pay their taxes. This decision will not only boost investors’ appetites - which is of particular importance given that we need investment more than ever to relaunch our struggling economies - but also empower public scrutiny of known tax-dodgers such as Apple and Amazon. Thanks to the new rules, we will know which companies are free-riding and which are contributing their fair share to society.

“The agreement on public country-by-country reporting will boost our fight against tax havens. Especially as we managed to include publication requirements for third countries listed on the EU’s grey or black lists of tax havens.

“I am proud that we have managed to close a loophole through which non-European companies could have escaped the new rules by simply filing an explanation. On EU soil, the same rules must apply to EU and non-EU companies.

“Now, that governments are helping companies to get through the pandemic with public money, it has become even more important to ensure big businesses contribute their fair tax share to the recovery.”

Ibán García del Blanco, S&D MEP and Parliament negotiator, said:

“For five years, the Parliament led by the S&D Group, has been fighting for meaningful public country-by-country reporting, while some EU governments put on the brakes. While we strongly regret that the Council refused our persistent demands for a worldwide country-by country-report on a disaggregated basis, the deal reached today is a major step towards more corporate transparency and contains a number of improvements.   

“During the negotiations we managed to include the requirement that companies will have to report all their full-time employees and list all subsidiaries. This will make it much harder for companies to blow smoke and conceal their real economic activities in each country.

“We included a strong review clause to continue the battle on global disaggregation of the information and limit the effects of the safeguard clause, which will allow companies to avoid reporting to protect their commercial interests. We will surely make it even more ambitious in the future.

“To truly empower public scrutiny, the data must be fully available and easily accessible. We fought for and obtained that the data will be free of charge, in an open format and in a common template.”

 

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