On June 12, MEPs from the economic affairs and legal affairs committees voted for a public Country-by-Country (CbC) reporting draft directive implementing a 'safeguard clause'. The clause will allow increased tax transparency but ensure no disruption in fair competition by preventing sensitive information to be shared publicly.
The text adopted by MEPs introduced a safeguard clause that will allow companies to "temporarily omit" some information when disclosure could be "seriously prejudicial". Companies will be able to ask individual authorities to exclude some information from the reporting, on the grounds that it is "commercially sensitive". The exemption would last one year, and can be renewed each year.
MEP Dariusz Rosati, the EPP Group's negotiator on new tax transparency rules for multi-national companies, accused European Socialists of discriminating against European companies. "We want to make visible how multi-national companies shift their profits to low tax countries. But European companies doing business outside Europe must not be forced to reveal everything if competitors don't", Rosati said.
Socialist parties and transparency organizations showed their disappointment with the safeguard clause. "This is disappointing, we need full transparency", Elena Gaita, a policy officer at Transparency International, told EUobserver. “Only if we know where the largest companies make their profits and how much they pay in taxes in every country they operate in, can citizens hold them to account," Oxfam said.
According to Spanish MEP Enrique Calvet Chambon, the exemption will be reviewed four years after entering into force, in order to check whether there has been any "abuse"."We will know which companies applied, and whether the exemption has been granted or not. We will also know how many exemptions have been granted by each member state", he said.
The vote needs to be confirmed by a plenary vote in the parliament, which will be followed by further MEPs' negotiations with member states to reach an agreement.
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