The European Parliament said on Thursday (March 4th) it expected negotiations “very soon” with the Portuguese EU Presidency on a new EU directive to allow multinational companies to publish information about where they make profits and pay taxes.
“Four years after the European Parliament adopted its position on the draft country-specific reports, EU governments are ready to sit down at the negotiating table and reach an agreement,” the EU Parliament said in a statement.
In a note released the day after the Portuguese Presidency was mandated to hold talks with Parliament on the new tax transparency law for multinational companies, Parliament said it expected “these negotiations will start very soon”.
In its position adopted four years ago, the EU House said that the information of multinational companies should be presented separately and for each tax jurisdiction outside the EU. These large companies should publish their annual financial report publicly and free of charge.
The European Parliament also called for the introduction of a safeguard clause for sensitive company data.
It is about the guideline “Public country-specific reporting”. Portugal received support on Wednesday to start negotiations with the European Parliament in so-called “trialogue” negotiations with the European Commission, in which the original proposal was presented back in 2016.
On Wednesday, the 27 mandated the Portuguese EU Presidency to initiate the dialogue on the adoption of this EU law to force multinational companies to publish information about where they make profits and pay taxes.
According to Lusa’s proposal, “public scrutiny of corporate taxes borne by multinational companies operating in the Union needs to be strengthened, as this is essential to promote transparency and corporate responsibility”.
“The establishment of common rules on corporate tax transparency will also serve the general economic interest by taking equivalent safeguards across the Union to protect investors, creditors and other third parties in general, in order to increase the trust of citizens in the Union in fairness of nationals restore tax systems, “it says.
The original proposal, presented by the EU executive in 2016, focuses on a new directive requiring large multinational companies to publish country-specific information about where they make their profits and where they pay taxes.
It is envisaged that such additional transparency rules will apply to active companies in the internal market, have a permanent presence in the EU and have an annual turnover of more than EUR 750 million per year.
According to Brussels, avoiding corporate taxes in Europe costs EU countries an estimated 50 to 70 billion euros per year.[Edited by Frédéric Simon]