Dear friends,

 

I'm sharing the positive news that the Competitiveness Council has ended with a clear majority of Ministers expressing support for public CBCR and calling on the Council to adopt its position and begin negotiations with the European Parliament without delay! 

 

We have a clear qualified majority, with 16 Member States definitely in favour and Ambassadors from the Permanent Representations to the EU will now formally vote in writing before Wednesday 3 of March. You can find a more detailed update below, as well as notes from the meeting attached. Well done on all the hard advocacy and campaigning work - we've seen the impact today!

 

You can find Eurodad's reaction below, Oxfam EU's reaction here and Transparency International EU's here. Please feel free to use this for inspiration in drafting your own reaction and let us know if we can support your efforts :) 

 

Eurodad media reaction

Momentum is building for stronger EU measures against corporate tax avoidance - Eurodad reaction to EU ministers’ discussion about public country by country reporting today

Today, EU ministers in the Competitiveness Council discussed transparency and corporate tax avoidance and, for the first time since the file was launched in 2016, a majority is taking shape in favor of finalising the negotiation of a new directive on public country by country reporting.

 

Tove Maria Ryding, Tax Coordinator at the European Network on Debt and Development (Eurodad), said:

 

“It is clear that a strong momentum is building for tougher measures to stop large-scale corporate tax avoidance. Finally, after years of delay and procrastination, we’re seeing a majority take shape among the EU Member States, in favour of moving forward with a new directive on public country by country reporting. These transparency rules will give citizens more information about where multinational corporations do business and what they really pay in tax in the countries where they operate.

 

“Today’s debate was extremely encouraging, and a sign that large-scale corporate tax avoidance is becoming even more politically unacceptable that it already was. As several Member States stressed, citizens across Europe are demanding that their governments step up the fight against large-scale corporate tax avoidance. Countries are losing hundreds of billions of euro to tax avoidance each year and in light of the Covid-19 crisis, it has s never been more urgent to move forward.

 

“We are not at the finishing line yet. Firstly, we need the EU Member States to formally adopt their position so that the negotiations with the European Parliament and the Commission can move forward. We expect them to make a decision on this next week. Secondly, there will be a big and important battle in making sure that the negotiation results in effective legislation, which really provides an overview of where corporations do business and how much they pay in tax in each country where they operate. If we end up with loopholes and creative ways in which corporations can withhold information, it can undermine the entire purpose of the directive. Therefore, we will be keeping a close eye on that.”

 

Earlier today, the United Nations High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda (FACTI Panel) published its recommendations on how to strengthen the global fight against illicit financial flows and international tax dodging. One of the panel’s key recommendations was that governments should introduce public country reporting. See comment from Eurodad here. 

 

Today's developments

There were some big developments during the meeting - Slovenia shifted from blocking to supporting the file, and Estonia, Latvia and Luxembourg appear to have moved to neutral. Estonia's comments weren't clear and were relatively positive so there is a possibility that they will support the general approach during the vote next week.  Czechia wasn't very clear either, but it does look like they plan to vote against the general approach.

 

Ireland led a group of five countries in signing a statement opposing the legal basis of the proposal. This hasn't been published yet but we know Ireland, Cyprus and Malta have supported it. The good news is that a similar statement was signed by 10 Member States during the last Ministerial debate, so the strong opposition has shrunk considerably! I'll share it when it's available.

 

The other positive from today's meeting is that several Member States called for an ambitious outcome during trialogue, Denmark highlighted their support for global disaggregation of data and a lower threshold so that the rules would apply to more companies. Italy called for a reduction in the reporting delay included in the corporate get out clause (i.e. the loophole that would allow MNCs delay reporting anything they consider commercially sensitive). The Netherlands also supported global disaggregation and called on Portugal to remove the comply-or-explain loophole.

 

You can find more detailed notes attached. This includes a table with a rough capture of every country's statement, as well as the statements by the Portuguese Presidency and Commissioner Mariead McGuinness. 

 

Positions expressed during Competitiveness Council, 25 February 2021:
Likely supportive (16)	Likely opposed (7)	Likely neutral (4)
Austria, Belgium, Bulgaria, Denmark, Finland, France, Greece, Italy, Lithuania, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain	Croatia, Cyprus, Czech Republic, Hungary, Ireland, Luxembourg, Malta, Sweden	Estonia, Germany, Latvia, Luxembourg
Predicted outcome:
Qualified majority in favour of adopting position in Council – YES -  16 supportive Member States (15 of 27 required) -  71.4% of EU population (65% required)
The categorisation is based on the position indicated by the Member State in the Competitiveness Council meeting on 25 February 2021 expressed verbally or in writing in meetings with civil society, official documents, past Competitiveness Council meetings, through Parliamentary Questions or in public statements since that time. Bold indicates countries with a level of uncertainty attached to their position, based on national elections, the presence of interim or caretaker governments or unclear positions in the past. Red indicates a change of position since the previous mapping.

 

What are the next steps?

Member States will be invited to vote through a written procedure. Ambassadors in each Member States' Permanent Representation to the EU will confirm in writing if their Member State supports the Council adopting a position on public CBCR. The Portuguese Presidency has set Wednesday 3 of March as the deadline for the written procedure, so we will have confirmation of the outcome from the Coreper meeting on the 3 March. In parallel, the European Parliament is preparing to try and begin negotiations as quickly as possible, with a view to approving the mandate to negotiate in the March or April plenary.

 

I'll be back in touch shortly with Doodles for our upcoming planning, as well as an updated state of play document reflecting today's developments :)

 

Warm wishes,

Olivia

Olivia Lally

Senior Policy and Advocacy Officer - Tax Justice

Eurodad, European Network on Debt and Development

Tel: +32 2894 4641

Mob: +32 (0) 45 6180 669 (Belgium)

Mob: +353 (0) 85 1430 648 (Ireland/ WhatsApp)

Skype: [email protected]

Rue d’Edimbourg, 18-26. Brussels 1050. Belgium