The European Commission has launched a public consultation on country-by-country reporting by multinational companies.
Accounting standards do not currently require disclosure on a country-by-country basis in a group’s consolidated accounts, it explained in a statement.
The main ‘goals’ of country-by-country reporting, the Commission said, would be to help investors to better assess the different national activities of multinational companies, and ‘to enhance transparency about capital flows, for instance, to better enforce tax rules’.
Christian Aid said the news was ‘hugely exciting’. The additional information would help developing countries ‘crack down on the tax dodging which currently costs them more than they receive in aid’, the charity said.
Some tax experts are sceptical about Christian Aid’s estimate that ‘tax-dodging firms rob poor countries of more than $160bn a year’ but few have been prepared to say so publicly. The figure included the estimated impact of alleged ‘mispricing’, or false invoicing, and ‘abusive transfer pricing’. Deloitte's head of tax policy, Bill Dodwell, has claimed that the charity’s proposed solutions ‘aren't based on any firm foundation’.
‘That the Commission is now considering the introduction of a new accounting standard for multinationals is a major victory for Christian Aid, the Tax Justice Network and campaigning accountant Richard Murphy who created the concept of country-by-country reporting,’ Christian Aid said.
David McNair, the charity's Senior Economic Justice Adviser, said: ‘If the new rules are introduced, then poorer countries will at last have more of the information they need to crack down on the unscrupulous multinationals which hide their profits in order to lower their tax bills.’
The European Commission has launched a public consultation on country-by-country reporting by multinational companies.
Accounting standards do not currently require disclosure on a country-by-country basis in a group’s consolidated accounts, it explained in a statement.
The main ‘goals’ of country-by-country reporting, the Commission said, would be to help investors to better assess the different national activities of multinational companies, and ‘to enhance transparency about capital flows, for instance, to better enforce tax rules’.
Christian Aid said the news was ‘hugely exciting’. The additional information would help developing countries ‘crack down on the tax dodging which currently costs them more than they receive in aid’, the charity said.
Some tax experts are sceptical about Christian Aid’s estimate that ‘tax-dodging firms rob poor countries of more than $160bn a year’ but few have been prepared to say so publicly. The figure included the estimated impact of alleged ‘mispricing’, or false invoicing, and ‘abusive transfer pricing’. Deloitte's head of tax policy, Bill Dodwell, has claimed that the charity’s proposed solutions ‘aren't based on any firm foundation’.
‘That the Commission is now considering the introduction of a new accounting standard for multinationals is a major victory for Christian Aid, the Tax Justice Network and campaigning accountant Richard Murphy who created the concept of country-by-country reporting,’ Christian Aid said.
David McNair, the charity's Senior Economic Justice Adviser, said: ‘If the new rules are introduced, then poorer countries will at last have more of the information they need to crack down on the unscrupulous multinationals which hide their profits in order to lower their tax bills.’
