State opposes EU legislation to make taxing of companies more transparent

Law requiring large firms to publicly report taxes and profits blocked by 13 members

EU ministers on Thursday blocked attempts by the European Commission to require multinational companies to publicly report their tax payments country by country. Such reporting could help to dissuade companies from shifting profits to low-tax jurisdictions or those that apply no tax.

Thirteen states, including the Republic, Luxembourg, Sweden, Austria, Cyprus, Malta insisted that the issue was not appropriate for Thursday’s Competitiveness Council. The position came with the recommendation of council legal services. As a tax matter, because the proposal involves “disclosure of income tax information’’, they insisted, it was a matter for unanimity voting in the Finance Council where they would each be able to veto it.

Germany, which had previously opposed the measure, abstained, so it was defeated by one vote.

The commission and the Finnish presidency maintained that the measure was part of the Accountancy directive and could therefore, as a single market issue, be decided by qualified majority. But a blocking majority emerged which referred the legislation back to a meeting of ambassadors which is likely to send it to finance ministers.


Commissioner Jyrki Katainen vice-president for jobs, growth, and investment, said he regretted the meeting had not been able to back a compromise. The legislation, which was strongly backed by many states, was all about “fairness” and transparency, he said. “Once paying taxes why be prepared to inform the rest of society how much they are paying.”The Republic was represented by Damien English, Minister of State at the Department of Housing.


The Organisation for Economic Cooperation and Development adopted country-by-country tax reporting for large multinational companies as part of the ambitious project to prevent companies from shifting profits to low- or no-tax jurisdictions.

The reports give tax authorities a clearer picture of the worldwide business activities of multinationals.

The rules require large multinational companies with an annual turnover of $750 million or more to provide country-by-country tax and profit reports to national tax authorities. But the information isn’t made public.

The European Commission proposed in 2016 to make such reports publicly available – a move opponents say would undermine the OECD’s base erosion and profit shifting rules. – Additional reporting: Bloomberg

Patrick Smyth

Patrick Smyth

Patrick Smyth is former Europe editor of The Irish Times