The European Commission (EC) has launched a public consultation on the issue of corporate tax transparency in the EU. The objective of the consultation is to establish whether requiring companies to disclose more information about the taxes they pay could highlight and help tackle tax avoidance and aggressive tax practices within the EU. One of the proposed initiatives is that companies could be required to disclose the taxes they pay, in every country where they operate.
The EC has indicated that targeting corporate tax avoidance is a top priority. The consultation is part of the broader Action Plan for Fair and Efficient Corporate Taxation. The Commission's work follows through on the commitments made by G20 leaders to take action to ensure that tax authorities freely exchange information about large multinationals, including through country-by-country reporting (CBCR).
Transparency requirements currently exist for banks under the Capital Requirement Directive IV (CRD IV) and for large extractive and logging industries under the Accounting Directive in the form of country-by-country reporting.
This consultation aims to assess whether extending such public disclosure obligations to multinationals in other sectors could help address tax avoidance. The consultation document sets out a number of tentative options around possible disclosure and also seeks views on the potential impact of enhanced tax transparency.