It is being reported this week that the EU are having a rethink over whether multinationals should put their country specific tax details in the public domain. Announcements last month stated that the EU would be following the OECD BEPS approach to country-by-country reporting, meaning that tax liabilities and profits by country will be shared between tax authorities but not released to the public. The OECD concluded that putting tax authorities in the picture would be enough to improve compliance by multinationals, but the EU continues to indicate that more may be needed.
Large companies already publish large volumes of information. Pick any public company you like and you can find many hundreds of pages of disclosures in terms of financial and other information, usually in the investor relations section of their website. There has always been a question mark over the general public’s appetite for ploughing through these, although no doubt some people find them a good read.
Whether the inclusion of the country-by-country reporting detail will actually make any difference is debatable. The corporates have resisted for various reasons including concerns in terms of disclosure of competitively sensitive information, a compliance burden that is not justified, and the risk of misunderstanding of a highly complex area. The recent Google/HMRC furore is a perfect case study in this respect; the Public Accounts Committee will be hearing from them both this week on the £130m agreement, but what if this turns out to be the right amount of tax all along?
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