The European Commission submitted a proposal in April 2016 to require large multinational companies (those with turnover in excess of EUR 750 million) to disclose publicly details of the tax they pay within the EU on a country-by-country basis.
The European Commission submitted a proposal in April 2016 to require large multinational companies (those with turnover in excess of EUR 750 million) to disclose publicly details of the tax they pay within the EU on a country-by-country basis. This measure would complement the introduction of country-by-country reporting to EU tax authorities.
The proposal involved an amendment to the accounting directive. The Commission’s understanding of the legal position was that the directive does not propose the harmonisation of taxes, but instead refers to financial reporting obligations as regards income tax information. This would mean the proposal was subject to qualified majority voting, not unanimity, as would be the case for legislation dealing with the harmonisation of tax rules.
We understand that the EU legal service is of the opinion that the Commission’s proposals relate to fiscal provisions, which means they must be based on TFEU, art 115, requiring unanimous consent of the EU member states.
The Commission’s position was that TFEU, art 50, which concerns the right of establishment and is the regular legal basis for initiatives in the area of company law, accounting and corporate financial reporting was the appropriate legal basis.
The proposal is currently awaiting consideration by the EU Parliament and the Council.
The European Commission submitted a proposal in April 2016 to require large multinational companies (those with turnover in excess of EUR 750 million) to disclose publicly details of the tax they pay within the EU on a country-by-country basis.
The European Commission submitted a proposal in April 2016 to require large multinational companies (those with turnover in excess of EUR 750 million) to disclose publicly details of the tax they pay within the EU on a country-by-country basis. This measure would complement the introduction of country-by-country reporting to EU tax authorities.
The proposal involved an amendment to the accounting directive. The Commission’s understanding of the legal position was that the directive does not propose the harmonisation of taxes, but instead refers to financial reporting obligations as regards income tax information. This would mean the proposal was subject to qualified majority voting, not unanimity, as would be the case for legislation dealing with the harmonisation of tax rules.
We understand that the EU legal service is of the opinion that the Commission’s proposals relate to fiscal provisions, which means they must be based on TFEU, art 115, requiring unanimous consent of the EU member states.
The Commission’s position was that TFEU, art 50, which concerns the right of establishment and is the regular legal basis for initiatives in the area of company law, accounting and corporate financial reporting was the appropriate legal basis.
The proposal is currently awaiting consideration by the EU Parliament and the Council.
