Tax Transparency

It's time for fiscal transparency and corporate accountability

People
Status
ongoing
Start date
July 2015
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What is the problem?

In the current international financial system, multinational companies are under no legal obligation to disclose this information regarding their activities, profits and the taxes they pay in each country of operation. Key financial data is published annually in a consolidated financial statement. This allows some companies to obscure their presence in jurisdictions with low- or zero tax rates, use legal loopholes to hide their profit-shifting practices aimed at reducing their tax bills, and avoid public scrutiny and accountability altogether.

The current system makes it impossible to understand what is happening within a group of companies from a tax perspective and track their contributions to the societies they operate in. On top of this, as many of the recent corporate scandals have shown, acts of corruption are very often aided by the use of opaque company structures and secrecy jurisdictions. The use of offshore companies and their lack of transparency pose increasing risks for local communities, a healthy business environment and society at large.

What are we doing?

The EU can put an end to multinationals’ secrecy by adopting mandatory legislation on corporate tax transparency, requiring companies to publish key financial information on a country-by-country basis, so called public “country-by-country reporting” (CBCR).

Transparency International EU is currently focusing its efforts on an advocacy campaign aimed at adopting EU legislation on corporate and tax transparency.

The primary purpose of this legislation is to increase corporate accountability and transparency by providing citizens with adequate information to assess multinationals’ economic activities, payments, structures and whereabouts. Basic information on where companies are located, how many people they employ, what profits they make and how much they pay in tax is crucial to achieve this objective.

This campaign builds on previous work Transparency International EU has done in the extractive and banking sectors.

Recent News

Article

EU Council: Stop watering down tax transparency proposals

Not that long ago the word “tax” for most people would mean something rather boring and technical, for only accountants and lawyers to deal with. This has changed dramatically in recent years. Scandal after scandal, starting with Offshore Leaks...
Article

Business Europe as usual?

We thought we’d take a look at the arguments against transparency being made by Business Europe by taking a look at their paper published last July and address some of their main concerns.
Article

Rotten to the core: corporate tax & secrecy

Recently, former European Commissioner Neelie Kroes wrote on the recent Apple-tax case that: “state aid is not a cure for all ills”. While the airwaves have been full of debates on the rights and wrongs of the ruling, Kroes has hit the nail on...

Resources

Do corporate claims on public disclosure stack up?

This publication examines claims made by multinational corporations regarding the competitiveness impacts of public country-by-country reporting.

Transparency in corporate reporting – Assessing emerging market multinationals

Transparency in corporate reporting – Assessing the world’s largest companies

Transparency in corporate reporting – Assessing the world’s largest telecommunications companies

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Want to know more? Get in touch

Elena Gaita

Policy Officer – Corporate Transparency
egaita@transparency.org