The European Commission, on July 11, launched a public consultation on the potential economic consequences of going forward with a requirement that financial intuitions publicly report, on a country-by-country basis, their profit and loss before tax, their tax on profit or loss, and public subsidies received. The country-by-country reporting requirement is slated to take effect January 1, 2015, pursuant to Article 89 of the Capital Requirements Directive (2013/36/EU).
The Commission is seeking input on the positive effects of the county-by-country disclosures as well as potential negative effects, such as impact on competitiveness, investment and credit availability, and stability of the financial system.
Comments submitted by the consultation’s December 9 deadline will be considered by the Commission as it prepares a report for the European Parliament, due December 31. The Commission notes that it could recommend an amendment or deferral of the country-by-country reporting obligations if significant negative consequences are identified.
The consultation follows the Commission’s appointment of PwC to assess the impact of the proposal, a decision protested by NGOs which charge that the accounting firm is too biased against country-by-country reporting to assess the proposal fairly.
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