CESI Responds To EC Proposals On CbC Reporting

The European Confederation of Independent Trade Unions (CESI) has said that the proposed country-by-country reporting (CbCR) requirements are insufficient, and added that an extended CbCR, disclosure of tax rulings, and whistle-blower protection are key to ensuring corporate tax transparency.

In its response to the public consultation on corporate tax transparency launched by the Commission in June, CESI said that it is crucial to extend the CbCR obligation, through a legally binding instrument, to all sectors and to all major companies (by lowering the existing threshold for large companies of EUR750m/USD848m).

On June 17, 2015, The Commission launched a public consultation to gather feedback on whether companies should have to publicly disclose certain tax information, including through CbCR. Earlier in March 2015, the Commission proposed a Tax Transparency Package to enhance cooperation between member states on corporate tax issues. A key element in the Package was a proposal for the automatic exchange of information on tax rulings.

CESI highlighted that not all EU member states are OECD members; the recommendations of the BEPS project are not binding; and that the information provided would be only available to tax authorities and not to the public.

CESI President Romain Wolff said: “Extended CbCR obligations would help create greater transparency and allow tax administrations to effectively understand and control where economic activities are located and avoid illegitimate transfer pricings.”

CESI called for a disclosure of tax-related information (including tax rulings) not only to tax authorities but also to the public. It said: “From a trade union perspective, an automatic public CbCR mechanism would also save time and resources for tax administrations which, due to budget cuts, in many places already lack the necessary resources to carry out their duties effectively.”

CESI added: “In this context, a CbCR tool would greatly support tax administration workers with their investigation work and make them more independent from cooperation with other national tax administrations. Furthermore, CESI believes that using a dedicated online register with important information would allow data to be more easily accessible to a variety of stakeholders. This would not only enhance cooperation at EU-level in a number of respects but also have an important deterrent effect.”

“More than ever, the European Commission must now show political determination at the highest level to coordinate the fight against harmful tax practices with the EU member states,” Wolff concluded.