By Davide Anghileri, University of Lausanne, Switzerland
A proposal to make public country-by-country reports on large multinationals held by EU tax administrations has failed in the EU Competitiveness Council (COMPET). A majority of EU nations did not support the measure in a 28 November vote.
Some countries, including Cyprus, the Czech Republic, Estonia, Hungary, Ireland, Latvia, Luxembourg, Malta, Slovenia, and Sweden, argued that the COMPET Council was not the appropriate Council configuration for adopting a public country-by-country reporting proposal.
In their opinion, measures relating to the disclosure of income tax information must be based on Article 115 TFEU since both the aim and the content of the proposal relate to fiscal provisions, not EU single market law. Therefore, the project must be approved in the ECOFIN Council, taking due account of the relevant procedural rules.
It should be noted that measures related to tax law, unlike those associated with single market law, require unanimous approval by member states, not a mere majority vote.
Belgium, Denmark, France, Italy, the Netherlands, Poland, and Spain were among countries that held the opposite view, arguing that the core of the legislation deals with transparency, not taxation. Germany and UK did not vote.
During the debate, all the countries supported the idea of increased transparency for company tax reporting and said they aimed for a fair, efficient and growth tax system.
However, more work is needed on this proposal due to the need for a common EU tax base and higher standards for tax transparency, countries said.
Davide Anghileri
Davide Anghileri is a PhD candidate at the University of Lausanne, where he is writing his thesis on the attribution of profits to PEs. He researches transfer pricing issues and lectures for the Master of Advanced Studies in International Taxation and Executive Program on Transfer Pricing.
Anghileri, a Contributing Editor at MNE Tax, previously worked as a policy advisor to the Swiss government on BEPS issues.
Davide can be reached at [email protected].
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