European Parliament urges CBCR public transparency
The European Parliament adopted a resolution to tackle tax avoidance and tax evasion via transparency measures to ameliorate limited resources of tax administrations. A summary and full content of the proposal are referenced herein:
- Publish country-by-country reporting (CBCR) template as part of annual reporting; The European Commission is to provide a legislative proposal to amend the Accounting Directive accordingly.
- Establish a consistent definition of “tax havens” by the end of 2015.
- Provide a blacklist of countries that do not combat tax evasion or that accept it.
- New treaties with developing countries should tax profits where value is created.
- EU Member States should agree on a Common Consolidated Corporate Tax Base (CCCTB).
- The EU should be taking a leading role to combat tax havens, tax fraud and evasion, leading by example.
- Beneficial information should be public; the Financial Action Task Force’s (FAFT) anti-money laundering recommendation is a minimum.
- Public scrutiny of tax governance and the monitoring of tax fraud cases; protect whistleblowers and journalistic sources.
- Transition period for developing countries to adopt the Automatic Exchange of Information mechanism.
These initiatives are accelerating the focus and intent for public tax disclosures in the very near future.
Most importantly, inclusion of the CBCR template as required documentation of annual reporting will automatically accelerate the due date for completion of such information. Thus, the year-end 2017 timeline proposed by the OECD will give way to this proposal and similar unilateral actions.