Irish government continues to block progress on tax transparency – Matt Carthy MEP
Sinn Féin MEP Matt Carthy has called on the Irish government to end its position of blocking progress on achieving public transparency over the tax affairs of corporate giants in the EU Council. The Midlands North West MEP was speaking from Strasbourg following a vote on the proposal for public country-by-country reporting for multinationals in the European Parliament today, Wednesday. The vote closed the Parliament’s first reading on the proposal, indicating the Parliament believes it will now be impossible to enter into and conclude negotiations with the Council before the end of the mandate in May.
Carthy said: “The proposal for public country-by-country reporting is the most important initiative for tax transparency that has ever been developed. It means that multinational corporations would be required to publicly report their turnover, profits and tax paid in each country in which they operate.
“It is the public aspect that the Fine Gael government is objecting to. The Irish government has introduced country-by-country reporting for companies with a turnover of more than €750 million in line with the OECD BEPS recommendation. But it has not introduced the requirement that the reporting be made public, and Irish government representatives have made it clear that they would oppose the financial data being made public in the Council.
“The Parliament adopted its position on this report in July 2017 but it has been blocked in the Council for several years now.
“I have several issues with the Parliament’s position on this proposal – including the fact that it will apply only to companies with an annual turnover of more than 750 million euros, and the insertion of a secrecy clause that will allow companies to omit public disclosure of income tax information on the grounds of commercial sensitivity.
“Yet the Parliament’s position is miles ahead of the Council’s. The latest compromise from the Romanian Presidency of the Council from January shows no progress on the Council’s text. We know that the states who are attempting to block or weaken this proposal in the Council include Ireland, Luxembourg, Germany, Malta, Austria, Cyprus, Sweden and Hungary. It is no coincidence that four of these states were among the five labelled ‘tax havens’ by the European Parliament this week.
“The Council’s position as it stands is hugely problematic. It inserts a secrecy clause that would allow massive discretion to companies to omit disclosures; it allows non-EU headquartered companies to use a ‘comply-or-explain’ clause to avoid reporting on their activities in jurisdictions outside of the EU, even in blacklisted jurisdictions; and it fails to cover letterbox companies. Most importantly it fails to include specific requirements that the reporting be fully disclosed publicly.
“Fine Gael need to publicly explain their position on this proposal in the Council, and stop attempting to shield multinational giants from public scrutiny. Maximum international transparency on tax is not a threat to tax sovereignty. In fact it is Sinn Féin that defends sovereignty across the board, while Fine Gael use it as a fig leaf to facilitate foreign corporates to avoid paying their taxes.
“There is absolutely no justification whatsoever for the Irish government, or any government, to oppose public country-by-country reporting. The only people with anything to fear from tax transparency are corporate tax cheats, and their cheerleaders.” ENDS