The Portuguese Presidency of the Council of the EU and the European Parliament have come to a political agreement on a draft bill to oblige multinational companies to be more transparent in taxation matters and disclose where they make profits and pay taxes.
This provisional agreement opens a path to the application of the directive known as “Public Country-by-Country Reporting (CbCR)”. The aim is to achieve greater taxation transparency, given that multinationals, whether based in the EU or not, with income greater than 750 million euros in each of the last two consecutive financial years are now obliged to publicly disclose information on the taxation of the income generated in each Member State.
In a press statement, the Portuguese Minister of State for the Economy and the Digital Transition, Pedro Siza Vieira, argued that “tax evasion and aggressive fiscal planning by large multinational companies deprive EU Member States of more than 50 billion euros in revenue a year. (…) At a time when the citizens are struggling with the effects of the pandemic, it is now more important than ever to demand true financial transparency as far as such practices are concerned”.
The text now agreed upon by the negotiators – the Portuguese Presidency, representing the Council of the EU, and the representatives of the European Parliament – will have to be confirmed by the EU institutions and transposed into the domestic law of the 27 Member States within a period of 18 months.