REPORT on the proposal for a directive of the European Parliament and of the Council amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches

21.6.2017 - (COM(2016)0198 – C8-0146/2016 – 2016/0107(COD)) - ***I

Committee on Economic and Monetary Affairs
Committee on Legal Affairs
Rapporteurs: Hugues Bayet, Evelyn Regner
(Joint committee procedure – Rule 55 of the Rules of Procedure)

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a directive of the European Parliament and of the Council amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches

(COM(2016)0198 – C8-0146/2016 – 2016/0107(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

–  having regard to the Commission proposal to Parliament and the Council (COM(2016)0198),

–  having regard to Article 294(2) and Article 50(1) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C8-0146/2016),

–  having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

–  having regard to the reasoned opinions submitted within the framework of Protocol No 2 on the application of the principles of subsidiarity and proportionality, by the Irish Houses of the Oireachtas and the Swedish Parliament, asserting that the draft legislative act does not comply with the principle of subsidiarity,

–  having regard to the opinion of the Committee on Legal Affairs on the proposed legal basis,

–  having regard to the opinion of the European Economic and Social Committee of 21 September 2016[1],

–  having regard to the OECD Action Plan on Base Erosion and Profit Shifting (BEPS),

–  having regard to Rules 59 and 39 of its Rules of Procedure,

–  having regard to the joint deliberations of the Committee on Economic and Monetary Affairs and the Committee on Legal Affairs under Rule 55 of the Rules of Procedure,

–  having regard to the report of the Committee on Economic and Monetary Affairs and the Committee on Legal Affairs and the opinion of the Committee on Development (A8-0227/2017),

1.  Adopts its position at first reading hereinafter set out;

2.  Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

3.  Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Amendment    1 Proposal for a directive Recital -1 (new)
Text proposed by the Commission	Amendment
	(-1)  Equality of tax treatment for all, and in particular for all undertakings, is a sine qua non for the single market. A coordinated and harmonised approach to the implementation of national tax systems is vital for the proper functioning of the single market, and would contribute to preventing tax avoidance and profit shifting.
Amendment    2 Proposal for a directive Recital -1 a (new)
Text proposed by the Commission	Amendment
	(-1a)  Tax avoidance and tax evasion, along with profit-shifting schemes, have deprived governments and populations of the resources necessary to, among other things, ensure that there is universal free access to public education and health services and state social services, and have deprived states of the possibility of ensuring a supply of affordable housing and public transport, and of building infrastructure that is essential in order to achieve social development and economic growth. In short, such schemes have been a factor of injustice, inequality and economic, social and territorial divergences.
Amendment    3 Proposal for a directive Recital -1 b (new)
Text proposed by the Commission	Amendment
	(-1b)  A fair and effective corporate tax system should respond to the urgent need for a progressive and fair global tax policy, promote the redistribution of wealth and combat inequalities.
Amendment    4 Proposal for a directive Recital 1
Text proposed by the Commission	Amendment
(1)  In recent years, the challenge posed by corporate income tax avoidance has increased considerably and has become a major focus of concern within the Union and globally. The European Council in its conclusions of 18 December 2014 acknowledged the urgent need to advance efforts in the fight against tax avoidance both at global and Union level. The Commission in its communications entitled ‘Commission Work Programme 2016 - No time for business as usual’16 and ‘Commission Work Programme 2015 - A New Start’17 identified as a priority the need to move to a system whereby the country in which profits are generated is also the country of taxation. The Commission also identified as a priority the need to respond to our societies’ call for fairness and tax transparency.	(1)  Transparency is essential for the smooth functioning of the Single Market. In recent years, the challenge posed by corporate income tax avoidance has increased considerably and has become a major focus of concern within the Union and globally. The European Council in its conclusions of 18 December 2014 acknowledged the urgent need to advance efforts in the fight against tax avoidance both at global and Union level. The Commission in its communications entitled ‘Commission Work Programme 2016 - No time for business as usual’16 and ‘Commission Work Programme 2015 - A New Start’17 identified as a priority the need to move to a system whereby the country in which profits are generated is also the country of taxation. The Commission also identified as a priority the need to respond to European citizens’ call for transparency and the need to act as a reference model for other countries. It is essential that transparency takes into account reciprocity between competitors.
__________________	__________________
16 COM(2015) 610 final of 27 October 2015.	16 COM(2015) 610 final of 27 October 2015.
17 COM(2014) 910 final of 16 December 2014.	17 COM(2014) 910 final of 16 December 2014.
Amendment    5 Proposal for a directive Recital 2
Text proposed by the Commission	Amendment
(2)  The European Parliament in its resolution of 16 December 2015 on bringing transparency, coordination and convergence to corporate tax policies in the Union18 acknowledged that increased transparency in the area of corporate taxation can improve tax collection, make the work of tax authorities more efficient and ensure increased public trust and confidence in tax systems and governments.	(2)  The European Parliament in its resolution of 16 December 2015 on bringing transparency, coordination and convergence to corporate tax policies in the Union18 acknowledged that increased transparency, cooperation and convergence in the area of corporate taxation policy in the Union can improve tax collection, make the work of tax authorities more efficient, support policy-makers in assessing the current taxation system to develop future legislation, ensure increased public trust and confidence in tax systems and governments and improve investment decision-making based on more accurate risk profiles of companies.
__________________	__________________
18 2015/2010(INL).	18 2015/2010(INL).
Amendment    6 Proposal for a directive Recital 2 a (new)
Text proposed by the Commission	Amendment
	(2a)  Public country-by-country reporting is an efficient and appropriate tool to increase transparency in relation to the activities of multinational enterprises, and to enable the public to assess the impact of those activities on the real economy. It will also improve shareholders’ ability to properly evaluate the risks taken by companies, lead to investment strategies based on accurate information and enhance the ability of decision-makers to assess the efficiency and the impact of national legislations.
Amendment    7 Proposal for a directive Recital 2 b (new)
Text proposed by the Commission	Amendment
	(2b)  Country-by-country reporting will also have a positive impact on employees' rights to information and consultation as provided for in Directive 2002/14/EC and, by increasing knowledge on companies’ activities, on the quality of engaged dialogue within companies.
Amendment    8 Proposal for a directive Recital 4
Text proposed by the Commission	Amendment
(4)  Calling for a globally fair and modern international tax system in November 2015, the G20 endorsed the OECD ‘Action Plan on Base Erosion and Profit Shifting’ (BEPS) which aimed at providing governments with clear international solutions to address the gaps and mismatches in existing rules which allow corporate profits to shift to locations of no or low taxation, where no real value creation may take place. In particular, BEPS Action 13 introduces a country-by-country reporting by certain multinational undertakings to national tax authorities on a confidential basis. On 27 January 2016, the Commission adopted the ‘Anti-Tax Avoidance Package’. One of the objectives of that package is to transpose into Union law, the BEPS Action 13 by amending Council Directive 2011/16/EU20 .	(4)  Calling for a globally fair and modern international tax system in November 2015, the G20 endorsed the OECD 'Action Plan on Base Erosion and Profit Shifting' (BEPS) which aimed at providing governments with clear international solutions to address the gaps and mismatches in existing rules which allow corporate profits to shift to locations of no or low taxation, where no real value creation may take place. The BEPS initiative fell short of the pledge that the G20 finance ministers issued in Saint Petersburg in September 2013 when they stated that "profits should be taxed where economic activities deriving the profits are performed and where value is created."19a The failure of the BEPS process to meet its original objectives underlines the importance of heightened country-level reporting for all multinationals. In particular, BEPS Action 13 introduces a country-by-country reporting by certain multinational undertakings to national tax authorities on a confidential basis. On 27 January 2016, the Commission adopted the 'Anti-Tax Avoidance Package'. One of the objectives of that package is to transpose into Union law, the BEPS Action 13 by amending Council Directive 2011/16/EU20. However, taxing profits where the value is created requires a more comprehensive approach to country-by-country reporting that is based on public reporting.
__________________	__________________
	19a G20 Leaders’ Declaration, Saint Petersburg Summit, 5-6 September 2013, p. 12.
20 Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (OJ L 64, 11.3.2011, p. 1).	20 Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (OJ L 64, 11.3.2011, p. 1).
Amendment    9 Proposal for a directive Recital 4 a (new)
Text proposed by the Commission	Amendment
	(4a)  The International Accounting Standards Board (IASB) should upgrade the relevant International Financial Reporting Standards (IFRS) and the International Accounting Standards (IAS) to ease the introduction of public country-by-country reporting requirements.
Amendment    10 Proposal for a directive Recital 4 b (new)
Text proposed by the Commission	Amendment
	(4b)  Public country-by-country reporting has already been established in the European Union for the banking sector by Directive 2013/36/EU as well as for the extractive and logging industry by Directive 2013/34/EU.
Amendment    11 Proposal for a directive Recital 4 c (new)
Text proposed by the Commission	Amendment
	(4c)  The Union has demonstrated by an unprecedented introduction of public country-by-country reporting that it has become a global leader in the fight against tax avoidance.
Amendment    12 Proposal for a directive Recital 4 d (new)
Text proposed by the Commission	Amendment
	(4d)  Since the fight against tax evasion, tax avoidance and aggressive tax planning can only be successful with joint action on international level, it is imperative that the Union, while continuing to be a global leader in this struggle, coordinate its actions with international actors, for instance within the OECD framework. Unilateral actions, even if very ambitious, do not have a real chance of being successful, and, in addition, such actions put at risk the competitiveness of European companies and harm the Union’s investment climate.
Amendment    13 Proposal for a directive Recital 4 e (new)
Text proposed by the Commission	Amendment
	(4e)  More transparency in financial disclosure results in a win-win situation as tax administrations will be more efficient, civil society more involved, employees better informed, and investors less risk-averse. In addition, undertakings will benefit from better relations with stakeholders, resulting in more stability, along with easier access to finance due to a clearer risk profile and an enhanced reputation.
Amendment    14 Proposal for a directive Recital 5
Text proposed by the Commission	Amendment
(5)  Enhanced public scrutiny of corporate income taxes borne by multinational undertakings carrying out activities in the Union is an essential element to further foster corporate responsibility, to contribute to the welfare through taxes, to promote fairer tax competition within the Union through a better informed public debate and to restore public trust in the fairness of the national tax systems. Such public scrutiny can be achieved by means of a report on income tax information, irrespective of where the ultimate parent undertaking of the multinational group is established.	(5)  In addition to the increased transparency created by country-by-country reporting to national tax authorities, enhanced public scrutiny of corporate income taxes borne by multinational undertakings carrying out activities in the Union is an essential element to promote corporate accountability, and to further foster corporate social responsibility, to contribute to the welfare through taxes, to promote fairer tax competition within the Union through a better informed public debate, and to restore public trust in the fairness of the national tax systems. Such public scrutiny can be achieved by means of a report on income tax information, irrespective of where the ultimate parent undertaking of the multinational group is established. Public scrutiny, however, has to be conducted without harming the investment climate in the Union or the competitiveness of Union companies, especially SMEs as defined in this Directive and mid-cap companies as defined in Regulation (EU) 2015/10171a, which should be excluded from the reporting obligation established under this Directive.
	__________________
	1a Regulation (EU) 2015/1017 of the European Parliament and of the Council of 25 June 2015 on the European Fund for Strategic Investments, the European Investment Advisory Hub and the European Investment Project Portal and amending Regulations (EU) No 1291/2013 and (EU) No 1316/2013 — the European Fund for Strategic Investments (OJ L 182, 29.6.2013, p. 19.)
Amendment    15 Proposal for a directive Recital 5 a (new)
Text proposed by the Commission	Amendment
	(5a)  The Commission has defined corporate social responsibility (CSR) as the responsibility of enterprises for their impact on society. CSR should be company led. Public authorities can play a supporting role through a smart mix of voluntary policy measures and, where necessary, complementary regulation. Companies can become socially responsible either by following the law or by integrating social, environmental, ethical, consumer or human rights concerns into their business strategy and operations, or both.
Amendment    16 Proposal for a directive Recital 6
Text proposed by the Commission	Amendment
(6)  The public should be able to scrutinise all the activities of a group when the group has certain establishments within the Union. For groups which carry out activities within the Union only through subsidiary undertakings or branches, subsidiaries and branches should publish and make accessible the report of the ultimate parent undertaking. However for reasons of proportionality and effectiveness, the obligation to publish and make accessible the report should be limited to medium-sized or large subsidiaries established in the Union, or branches of a comparable size opened in a Member State. The scope of Directive 2013/34/EU should therefore be extended accordingly to branches opened in a Member State by an undertaking which is established outside the Union.	(6)  The public should be able to scrutinise all the activities of a group when the group has certain establishments within and outside the Union. Groups with establishments within the Union should comply with the Union principles of tax good governance. Multinational undertakings are operating worldwide and their corporate behaviour has a substantial impact on developing countries. Providing their citizens access to corporate country-by-country information would allow them and tax administrations in their countries to monitor, assess and hold those companies to account. By making the information public for each tax jurisdictions where the multinational undertaking is operating, the Union would increase its policy coherence for development and limit potential tax avoidance schemes in countries where domestic resources mobilization has been identified as a key component of the Union development policy.
Amendment    17 Proposal for a directive Recital 8
Text proposed by the Commission	Amendment
(8)  The report on income tax information should provide information concerning all the activities of an undertaking or of all the affiliated undertakings of a group controlled by an ultimate parent undertaking. The information should be based on the reporting specifications of BEPS’ Action 13 and should be limited to what is necessary to enable effective public scrutiny, in order to ensure that disclosure does not give rise to disproportionate risks or disadvantages. The report should also include a brief description of the nature of the activities. Such description might be based on the categorisation provided for in table 2 of the Annex III of Chapter V of the OECD “Transfer Pricing Guidelines on Documentation”. The report should include an overall narrative providing explanations in case of material discrepancies at group level between the amounts of taxes accrued and the amounts of taxes paid, taking into account corresponding amounts concerning previous financial years.	(8)  The report on income tax information should provide information concerning all the activities of an undertaking or of all the affiliated undertakings of a group controlled by an ultimate parent undertaking. The information should take into account the reporting specifications of BEPS’ Action 13 and should be limited to what is necessary to enable effective public scrutiny, in order to ensure that disclosure does not give rise to disproportionate risks or disadvantages, in terms of competitiveness or misinterpretation for the undertakings concerned. The report should also include a brief description of the nature of the activities. Such description might be based on the categorisation provided for in table 2 of the Annex III of Chapter V of the OECD “Transfer Pricing Guidelines on Documentation”. The report should include an overall narrative providing explanations, including in case of material discrepancies at group level between the amounts of taxes accrued and the amounts of taxes paid, taking into account corresponding amounts concerning previous financial years.
Amendment    18 Proposal for a directive Recital 9
Text proposed by the Commission	Amendment
(9)  In order to ensure a level of detail that enables citizens to better assess the contribution of multinational undertakings to welfare in each Member State, the information should be broken down by Member State. Moreover, information concerning the operations of multinational enterprises should also be shown with a high level of detail as regards certain tax jurisdictions which pose particular challenges. For all other third country operations, the information should be given in an aggregate number.	(9)  In order to ensure a level of detail that enables citizens to better assess the contribution of multinational undertakings to welfare in each jurisdiction in which they operate, both within and outside the Union, without harming the undertakings’ competitiveness, the information should be broken down by jurisdiction. Reports on income tax information can only be meaningfully understood and used if information is presented in a disaggregated fashion for each tax jurisdiction.
Amendment    19 Proposal for a directive Recital 11
Text proposed by the Commission	Amendment
(11)  To ensure that cases of non-compliance are disclosed to the public, statutory auditor(s) or audit firm(s) should check whether the report on income tax information has been submitted and presented in accordance with the requirements of this Directive and made accessible on the relevant undertaking’s website or on the website of an affiliated undertaking.	(11)  To ensure that cases of non-compliance are disclosed to the public, statutory auditor(s) or audit firm(s) should check whether the report on income tax information has been submitted and presented in accordance with the requirements of this Directive and made accessible on the relevant undertaking’s website or on the website of an affiliated undertaking, and that publicly-disclosed information is in line with the audited financial information for the undertaking within the time limits provided for in this Directive.
Amendment    20 Proposal for a directive Recital 11 a (new)
Text proposed by the Commission	Amendment
	(11a)   Cases of infringements by undertakings and branches of the requirements on reporting on income tax information, giving rise to penalties by Member States, under Directive 2013/34/EU, should be reported in a public registry managed by the European Commission. Those penalties could include, inter alia, administrative fines or exclusions from public calls for tenders and from the awarding of funding from the Union's Structural Funds.
Amendment    21 Proposal for a directive Recital 13
Text proposed by the Commission	Amendment
(13)  In order to determine certain tax jurisdictions for which a high level of detail should be shown, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of drawing up a common Union list of these tax jurisdictions. This list should be drawn up on the basis of certain criteria, identified on the basis of Annex 1 of the Communication from the Commission to the European Parliament and Council on an External Strategy for Effective Taxation (COM(2016) 24 final). It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement on Better Law-Making as approved by the European Parliament, the Council and the Commission and pending formal signature. In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States' experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.	deleted
Amendment    22 Proposal for a directive Recital 13 a (new)
Text proposed by the Commission	Amendment
	(13a)   In order to ensure uniform conditions for the implementation of Article 48b(1), (3), (4) and (6) and Article 48c(5) of Directive 2013/34/EU, implementing powers should also be conferred on the Commission. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council1a.
	________________
	1a Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by the Member States of the Commission's exercise of implementing powers (OJ L 55, 28.2.2011, p. 13).
Amendment    23 Proposal for a directive Recital 14
Text proposed by the Commission	Amendment
(14)  Since the objective of this Directive cannot be sufficiently achieved by the Member States but can rather, by reason of its effect, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality as set out in that Article, this Directive does not go beyond what is necessary in order to achieve that objective.	(14)  Since the objective of this Directive cannot be sufficiently achieved by the Member States but can rather, by reason of its effect, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. Union action is thus justified in order to address the cross-border dimension where there is aggressive tax planning or transfer pricing arrangements. This initiative responds to the concerns expressed by the interested parties about the need to tackle distortions in the single market without compromising Union competitiveness. It should not cause undue administrative burden on companies, generate further tax conflicts or pose the risk of double taxation. In accordance with the principle of proportionality as set out in that Article, this Directive does not go beyond what is necessary in order to achieve that objective, at least with regard to greater transparency.
Amendment    24 Proposal for a directive Recital 15
Text proposed by the Commission	Amendment
(15)  This Directive respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union.	(15)  Overall, within the framework of this Directive, the extent of the information disclosed is proportionate to the objectives of increasing public transparency and public scrutiny. This Directive is therefore considered to respect the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union.
Amendment    25 Proposal for a directive Recital 16
Text proposed by the Commission	Amendment
(16)  In accordance with the Joint Political Declaration of 28 September 2011 of Member States and the Commission on explanatory documents24, Member States have undertaken to accompany, in justified cases, the notification of their transposition measures with one or more documents explaining the relationship between the components of a directive and the corresponding parts of national transposition instruments. With regard to this Directive, the legislator considers the transmission of such documents to be justified.	(16)  In accordance with the Joint Political Declaration of 28 September 2011 of Member States and the Commission on explanatory documents24, Member States have undertaken to accompany, in justified cases, the notification of their transposition measures with one or more documents explaining the relationship between the components of a directive and the corresponding parts of national transposition instruments, for example in the form of a comparative chart. With regard to this Directive, the legislator considers the transmission of such documents to be justified to achieve the objective of this Directive and to avoid potential omissions and inconsistencies regarding implementation by the Member States under their national legislation.
__________________	__________________
24 OJ C 369, 17.12.2011, p. 14.	24 OJ C 369, 17.12.2011, p. 14.
Amendment    26 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48b – paragraph 1 – subparagraph 1
Text proposed by the Commission Amendment Member States shall require ultimate parent undertakings governed by their national laws and having a consolidated net turnover exceeding EUR 750 000 000 as well as undertakings governed by their national laws that are not affiliated undertakings and having a net turnover exceeding EUR 750 000 000 to draw up and publish a report on income tax information on an annual basis. Member States shall require ultimate parent undertakings governed by their national laws and having a consolidated turnover of or exceeding EUR 750 000 000 as well as undertakings governed by their national laws that are not affiliated undertakings and having a net turnover of or exceeding EUR 750 000 000 to draw up and make publicly available free of charge a report on income tax information on an annual basis.
Amendment    27 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48b – paragraph 1 – subparagraph 2
Text proposed by the Commission Amendment The report on income tax information shall be made accessible to the public on the website of the undertaking on the date of its publication. The report on income tax information shall be published in a common template available for free in an open data format and made accessible to the public on the website of the undertaking on the date of its publication in at least one of the official languages of the Union. On the same date, the undertaking shall also file the report in a public registry managed by the Commission.   Member States shall not apply the rules set out in this paragraph where such undertakings are established only within the territory of a single Member State and in no other tax jurisdiction.
Amendment    28 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48b – paragraph 3 – subparagraph 1
Text proposed by the Commission Amendment Member States shall require the medium-sized and large subsidiary undertakings referred to in Article 3(3) and (4) which are governed by their national laws and controlled by an ultimate parent undertaking which has a consolidated net turnover exceeding EUR 750 000 000 and which is not governed by the law of a Member State, to publish the report on income tax information of that ultimate parent undertaking on an annual basis. Member States shall require subsidiary undertakings which are governed by their national laws and controlled by an ultimate parent undertaking which on their balance sheet in a financial year has a consolidated net turnover of or exceeding EUR 750 000 000, and which is not governed by the law of a Member State, to publish the report on income tax information of that ultimate parent undertaking on an annual basis.
Amendment    29 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48b – paragraph 3 – subparagraph 2
Text proposed by the Commission Amendment The report on income tax information shall be made accessible to the public on the date of its publication on the website of the subsidiary undertaking or on the website of an affiliated undertaking. The report on income tax information shall be published in a common template available free of charge in an open data format and made accessible to the public on the date of its publication on the website of the subsidiary undertaking or on the website of an affiliated undertaking in at least one of the official languages of the Union. On the same date, the undertaking shall also file the report in a public registry managed by the Commission.
Amendment    30 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48b – paragraph 4 – subparagraph 1
Text proposed by the Commission Amendment Member States shall require branches which are opened in their territories by an undertaking which is not governed by the law of a Member State to publish on an annual basis the report on income tax information of the ultimate parent undertaking referred to in point (a) of paragraph 5 of this Article. Member States shall require branches which are opened in their territories by an undertaking which is not governed by the law of a Member State to publish and make publicly available free of charge on an annual basis the report on income tax information of the ultimate parent undertaking referred to in point (a) of paragraph 5 of this Article.
Amendment    31 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48b – paragraph 4 – subparagraph 2
Text proposed by the Commission Amendment The report on income tax information shall be made accessible to the public on the date of its publication on the website of the branch or on the website of an affiliated undertaking. The report on income tax information shall be published in a common template available in an open data format and made accessible to the public on the date of its publication on the website of the branch or on the website of an affiliated undertaking in at least one of the official languages of the Union. On the same date, the undertaking shall also file the report in a public registry managed by the Commission.
Amendment    32 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48b – paragraph 5 – point a
Text proposed by the Commission Amendment (a)  the undertaking which opened the branch is either an affiliated undertaking of a group which is controlled by an ultimate parent undertaking not governed by the law of a Member State and which has a consolidated net turnover exceeding EUR 750 000 000 or an undertaking that is not an affiliated and which has a net turnover exceeding EUR 750 000 000; (a)  the undertaking which opened the branch is either an affiliated undertaking of a group which is controlled by an ultimate parent undertaking not governed by the law of a Member State and which on its balance sheet has a consolidated net turnover of or exceeding EUR 750 000 000, or an undertaking that is not an affiliated and which has a net turnover of or exceeding EUR 750 000 000;
Amendment    33 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48b – paragraph 5 – point b
Text proposed by the Commission Amendment (b)  the ultimate parent undertaking referred to in point (a) does not have a medium-sized or large subsidiary undertaking as referred to in paragraph 3. (b)  the ultimate parent undertaking referred to in point (a) does not have a medium-sized or large subsidiary undertaking as referred to in paragraph 3 already subject to the reporting obligations.
Amendment    34 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48b – paragraph 7 a (new)
Text proposed by the Commission Amendment   7a.   For Member States which have not adopted the euro, the amount in national currency equivalent to the amount set out in paragraphs 1, 3 and 5 shall be obtained by applying the exchange rate published in the Official Journal of the European Union and that is effective as of the date of the entry into force of this Chapter.
Amendment    35 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 2 – introductory part
Text proposed by the Commission Amendment 2.  The information referred to in paragraph 1 shall comprise the following: 2.  The information referred to in paragraph 1 shall be presented in a common template and shall comprise the following, broken down by tax jurisdiction:
Amendment    36 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 2 – point a
Text proposed by the Commission Amendment (a)  a brief description of the nature of the activities; (a) the name of the ultimate undertaking and, where applicable, the list of all its subsidiaries, a brief description of the nature of their activities and their respective geographical location;
Amendment    37 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 2 – point b
Text proposed by the Commission Amendment (b)  the number of employees; (b) the number of employees on a full-time equivalent basis;
Amendment    38 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 2 – point b a (new)
Text proposed by the Commission Amendment   (ba)  fixed assets other than cash or cash equivalents;
Amendment    39 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 2 – point c
Text proposed by the Commission Amendment (c)  the amount of the net turnover, which includes the turnover made with related parties; (c)  the amount of the net turnover, including a distinction between the turnover made with related parties and the turnover made with unrelated parties;
Amendment    40 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 2 – point g a (new)
Text proposed by the Commission Amendment   (ga)  stated capital;
Amendment    41 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 2 – point g b (new)
Text proposed by the Commission Amendment   (gb)  whether undertakings, subsidiaries or branches benefit from a preferential tax treatment from a patent box or equivalent regimes.
Amendment    42 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 3 – subparagraph 1
Text proposed by the Commission Amendment The report shall present the information referred to in paragraph 2 separately for each Member State. Where a Member State comprises several tax jurisdictions, the information shall be combined at Member State level. The report shall present the information referred to in paragraph 2 separately for each Member State. Where a Member State comprises several tax jurisdictions, the information shall be presented separately for each tax jurisdiction.
Amendment    43 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 3 – subparagraph 2
Text proposed by the Commission Amendment The report shall also present the information referred to in paragraph 2 of this Article separately for each tax jurisdiction which, at the end of the previous financial year, is listed in the common Union list of certain tax jurisdictions drawn up pursuant to Article 48g, unless the report explicitly confirms, subject to the responsibility referred to in Article 48e below, that the affiliated undertakings of a group governed by the laws of such tax jurisdiction do not engage directly in transactions with any affiliated undertaking of the same group governed by the laws of any Member State. The report shall also present the information referred to in paragraph 2 of this Article separately for each tax jurisdiction outside the Union.
Amendment    44 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 3 – subparagraph 3
Text proposed by the Commission Amendment The report shall present the information referred to in paragraph 2 on an aggregated basis for other tax jurisdictions. deleted
Amendment    45 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 3 – subparagraph 3 a (new)
Text proposed by the Commission Amendment   In order to protect commercially sensitive information and to ensure fair competition, Member States may allow that one or more specific items of information listed in Article 48c be temporarily omitted from the report as regards activities in one or more specific tax jurisdictions when they are of a nature such that their disclosure would be seriously prejudicial to the commercial position of the undertakings referred to in Article 48b(1) and Article 48b(3) to which it relates. The omission shall not prevent a fair and balanced understanding of the tax position of the undertaking. The omission shall be indicated in the report together with an explanation as to why this is the case and with a reference to the tax jurisdiction concerned.
Amendment    46 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 3 – subparagraph 3 b (new)
Text proposed by the Commission Amendment   Member States shall make such omissions subject to prior authorisation of the national competent authority. The undertaking shall seek each year a new authorisation from the competent authority, which will take a decision on the basis of a new assessment of the situation. Where the information omitted no longer complies with the requirement laid down in subparagraph 3a, it shall immediately be made publicly available.
Amendment    47 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 3 – subparagraph 3 c (new)
Text proposed by the Commission Amendment   Members States shall notify the Commission of the granting of such a temporary derogation and shall transmit to it, in a confidential manner, the omitted information together with a detailed explanation for the derogation granted. Every year, the Commission shall publish on its website the notifications received from Member States and the explanations provided in accordance with subparagraph 3a.
Amendment    48 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 3 – subparagraph 3 d (new)
Text proposed by the Commission Amendment   The Commission shall verify that the requirement laid down in subparagraph 3a is duly respected, and shall monitor the use of such a temporary derogation authorised by national authorities.
Amendment    49 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 3 – subparagraph 3 e (new)
Text proposed by the Commission Amendment   If the Commission concludes, after having carried out its assessment of the information received pursuant to subparagraph 3c, that the requirement laid down in subparagraph 3a is not fulfilled, the undertaking concerned shall immediately make the information publicly available.
Amendment    50 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 3 – subparagraph 3 f (new)
Text proposed by the Commission Amendment   The Commission shall, by means of a delegated act, adopt guidelines to assist Member States defining cases where the publication of information shall be considered seriously prejudicial to the commercial position of the undertakings to which it relates.
Amendment    51 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 5
Text proposed by the Commission Amendment 5.  The report on income tax information shall be published and made accessible on the website in at least one of the official languages of the Union. 5.  The report on income tax information shall be published in a common template available free of charge in an open data format and made accessible to the public on the date of its publication on the website of the subsidiary undertaking or on the website of an affiliated undertaking in at least one of the official languages of the Union. On the same date, the undertaking shall also file the report in a public registry managed by the European Commission.
Amendment    52 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48e – paragraph 1
Text proposed by the Commission Amendment 1.  Member States shall ensure that the members of the administrative, management and supervisory bodies of the ultimate parent undertaking referred to in Article 48b(1), acting within the competences assigned to them under national law, have collective responsibility for ensuring that the report on income tax information is drawn up, published and made accessible in accordance with Articles 48b, 48c and 48d. 1.  To strengthen accountability towards third parties and ensure appropriate governance, Member States shall ensure that the members of the administrative, management and supervisory bodies of the ultimate parent undertaking referred to in Article 48b(1), acting within the competences assigned to them under national law, have collective responsibility for ensuring that the report on income tax information is drawn up, published and made accessible in accordance with Articles 48b, 48c and 48d.
Justification
The change is necessary and appropriate to ensure consistency with recital 10 of this legislative proposal.
Amendment    53 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48g
Text proposed by the Commission Amendment Article 48g deleted Common Union list of certain tax jurisdictions   The Commission shall be empowered to adopt delegated acts in accordance with Article 49 in relation to drawing up a common Union list of certain tax jurisdictions. That list shall be based on the assessment of the tax jurisdictions, which do not comply with the following criteria:   (1)   Transparency and exchange of information, including information exchange on request and Automatic Exchange of Information of financial account information;   (2)   Fair tax competition;   (3)   Standards set up by the G20 and/or the OECD;   (4)   Other relevant standards, including international standards set up by the Financial Action Task Force.   The Commission shall regularly review the list and, where appropriate, amend it to take account of new circumstances.
Amendment    54 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48i – paragraph 1
Text proposed by the Commission Amendment The Commission shall report on the compliance with and the impact of the reporting obligations set out in Articles 48a to 48f. The report shall include an evaluation of whether the report on income tax information delivers appropriate and proportionate results, taking into account the need to ensure a sufficient level of transparency and the need for a competitive environment for undertakings. The Commission shall report on the compliance with and the impact of the reporting obligations set out in Articles 48a to 48f. The report shall include an evaluation of whether the report on income tax information delivers appropriate and proportionate results, and shall assess the costs and benefits of lowering the consolidated net turnover threshold beyond which undertakings and branches are required to report on income tax information. The report shall, in addition, evaluate any necessity to take further complementary measures, taking into account the need to ensure a sufficient level of transparency and the need to preserve and ensure a competitive environment for undertakings and private investment.
Amendment     55 Proposal for a directive Article 1 – paragraph 1 – point 2 a (new) Directive 2013/34/EU Article 48i a (new)
Text proposed by the Commission Amendment   (2a)  the following article is inserted:   ‘Article 48ia   No later than 4 years after the adoption of this Directive and taking into account the situation at OECD level, the Commission shall review assess and report on the provisions of this Chapter, in particular as regards:   -   undertakings and branches required to report on income tax information, particularly whether it would be appropriate to enlarge the scope of this Chapter to include large undertakings as defined in Article 3(4) and large groups as defined in Article 3(7) of this Directive;   -   the content of the report on income tax information as provided for in Article 48c;   -   the temporary derogation provided for in subparagraphs 3a to 3f of Article 48c(3).   The Commission shall submit the report to the European Parliament and to the Council, together with a legislative proposal, if appropriate.’
Amendment     56 Proposal for a directive Article 1 – paragraph 1 – point 2 b (new) Directive 2013/34/EU Article 48i b (new)
Text proposed by the Commission Amendment   (2b)  the following article is inserted:   ‘Article 48ib   Common template for the report   The Commission shall, by means of implementing acts, lay down the common template to which Article 48b(1), (3), (4) and (6) and Article 48c(5) refer. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 50(2).’
Amendment    57 Proposal for a directive Article 1 – paragraph 1 – point 3 – point b Directive 2013/34/EU Article 49 – paragraph 3 a
Text proposed by the Commission Amendment (3a)  Before adopting a delegated act, the Commission shall consult experts designated by each Member State in accordance with the principles laid down in the Interinstitutional Agreement on Better Law-Making of [date].’ (3a)  Before adopting a delegated act, the Commission shall consult experts designated by each Member State in accordance with the principles laid down in the Interinstitutional Agreement on Better Law-Making of 13 April 2016*, taking particular account of the provisions of the Treaties and the Charter of Fundamental Rights of the European Union.   ________________   * Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission on Better Law-Making (OJ L 123, 12.5.2016, p. 1.).’
Justification
It is necessary to take into account the provisions of the Treaties and the Charter of Fundamental Rights of the European Union
Amendment    58 Proposal for a directive Article 1 – paragraph 1 – point 3 a (new) Directive 2013/34/EU Article 51 – paragraph 1
Present text Amendment   (3a)  in Article 51, paragraph 1 is replaced by the following: Member States shall provide for penalties applicable to infringements of the national provisions adopted in accordance with this Directive and shall take all the measures necessary to ensure that those penalties are enforced. The penalties provided for shall be effective, proportionate and dissuasive.’ ‘Member States shall lay down rules on penalties applicable to infringements of the national provisions adopted in accordance with this Directive and shall take all the measures necessary to ensure that they are implemented. The penalties provided for shall be effective, proportionate and dissuasive.   Member States shall at least provide for administrative measures and penalties for the infringement by undertakings of national provisions adopted in accordance with this Directive.   Member States shall notify the Commission of those provisions at the latest by ... [date for transposition] and shall notify it without delay of any subsequent amendment affecting the provisions.   By ... (three years after the entry into force of this Directive) the Commission shall compile a list of the measures and penalties laid down by each Member State in accordance with this Directive.’

• [1]    OJ C 487, 28.12.2016, p. 62.

EXPLANATORY STATEMENT

Public Country-by-Country Reporting (CBCR) on tax-relevant company data is a key element in the fight against international tax evasion and tax avoidance and against the race to the bottom between tax systems. Yet, the benefits of this directive will go much further. With growing mobility and global and European-wide economic activities, transparency in terms of disclosure is a prerequisite for a strong corporate governance and a tool to enhance corporate social responsibility.

At present, citizens cannot use corporate published accounts to establish even whether multinationals operate in their tax jurisdictions. As multinational undertakings grow more complex and often, unfortunately, less transparent, the problem is getting worse. Most countries use International Accounting Standards. Therefore, public CBCR will be a cost-effective way to generate change in global corporate transparency for the benefit of our societies, including citizens, shareholders, tax authorities, investors, economists, and it will give them a means to hold governments and multinational companies to account.

Your rapporteurs believe that beyond the tax-related and corporate accountability objectives, this directive is also a tool to enhance worker’s rights to information and consultation. Public reporting strengthens dialogue and promotes mutual trust within undertakings since it can provide objective and reliable data about the companies’ situation, raising in this way awareness in all stakeholders, including employees, of adaptation needs. It also promotes employee involvement in the operation and in the future of the undertaking and increase its competitiveness.

The European Parliament has long been calling for public CBCR. Already in 2011, it adopted its position regarding country-by-country reporting stating that the quality of financial reporting is crucial to combat tax evasion effectively and that it would equally be beneficial for investors in all sectors, thereby contributing to good governance globally. In 2014, CBCR became part of the discussion within the framework of the Directive on non-financial reporting. Finally, when the rapporteur for the Shareholders' Rights Reform, Sergio Cofferati, pushed to introduce public CBCR in the Accounting Directive, the Commission decided to present a specific proposal on the matter in the form of an amending act to the Accounting Directive. This amendment to the Accounting Directive can play a crucial role in corporate reporting.

Your rapporteurs propose to enhance transparency with regard to the information undertakings should provide, and suggest the following main improvements to the Commission's text:

•  In view of Better Lawmaking, the introduction of new categories of undertakings and groups is to be avoided. This amendment to the Accounting Directive should be aligned with the logic of the Accounting Directive. The thresholds for micro, small and medium and large undertakings have long been defined. The concept goes back to the 4th company law directive in 1978. The need for the introduction of a new threshold has not been until now satisfactorily justified by the Commission. Since SMEs do not have the resources to invest into letterbox company structures to artificially shift profits, they are being pushed into a competitive disadvantage vis-à-vis multinationals. In order to ensure a healthy single market it is essential to establish a fair, efficient, transparent and growth-friendly common corporate reporting system based on the principle that profits should be taxed in the country where they are generated. Therefore, large groups as defined in Article 3(7) and all large undertakings as defined in Article 3 (4) should be subject to the new disclosure requirements.

•  Your rapporteurs consider that it would be inappropriate to limit the scope of this directive to information related to EU Member States and tax havens and, therefore, even if, in principle, they would not be against the idea of an EU blacklist of tax havens established on the basis of clear criteria, they propose that multinational corporations should provide information on their activities for each jurisdiction where they operate, also outside the European Union. Public disclosure of such information is not a sanction for non-cooperative jurisdictions but rather a prerequisite for those operating in a well-functioning single market.

•  With a view to enhancing public scrutiny and global corporate transparency, your rapporteurs consider that multinational corporations should disclose relevant information for all countries worldwide in which they operate so that taxes are paid where the profits are actually generated. Your rapporteurs’ call for non-aggregated data to be disclosed is in line with the EU’s policy coherence for development as it aims at promoting tax compliance and at providing developing countries with effective help in gaining access to their tax revenues.

•  Your rapporteurs consider it essential that the format of the publication allows for comparison of data and, therefore, propose a standardisation of the format of the reporting documents for all companies within the scope of this directive.

To conclude, your rapporteurs would like to underline the importance for a proper functioning of the single market of a coordinated and harmonised approach to the implementation of corporate reporting systems. In this context, your rapporteurs want to stress, once again, that more transparency of multinational undertakings’ activities is key for putting an end to profit shifting, operated via several mechanisms, such as letterbox companies, patent boxes and transfer pricing, and also to unhealthy tax competition practices between legal systems, which too often have been used to the detriment of citizens, in particular tax payers, employees, and SMEs.

MINORITY OPINION

pursuant to Rule 52a(4) of the Rules of Procedure, by Bernard Monot and Gilles Lebreton

Country-by-country reporting is part of an approach to combating tax optimisation and tax fraud that we have supported from the outset. We therefore voted in favour on the two TAXE reports, on texts making the automatic exchange of information on tax rulings mandatory, on combating hybrid mismatch arrangements, and on the four conventions on the automatic exchange of information (Switzerland, San Marino, Liechtenstein and Monaco).

Country-by-country reporting is a necessary tool. Despite this, however, we take the view that making information public creates too much of a competitive disadvantage, and is harmful to European businesses. A Chinese competitor that is not established in the EU would, for example, have free access to sensitive financial and commercial information.

The derogations proposed in the text are only limited ones, and are, in our view, insufficient, especially if the third-country data are presented in a disaggregated way.

We are in favour of the automatic exchange of these data among tax authorities, as it would enable them to pinpoint situations in which a company is not paying its taxes in the place in which its activities being carried out. Where necessary, it would enable the tax authorities to carry out inspections with a view to recovering the sums that are actually due when the basic taxable amount has wrongly been moved elsewhere.

OPINION OF THE COMMITTEE ON LEGAL AFFAIRS ON THE LEGAL BASIS

Mr Pavel Svoboda

Chair

Committee on Legal Affairs

BRUSSELS

Mr Roberto Gualtieri

Chair

Committee on Economic and Monetary Affairs

BRUSSELS

Subject:  Opinion on the legal basis of the Commission proposal for a directive of the European Parliament and of the Council amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches (COM(2016)0198 – C8-0146/2016 – 2016/0107(COD))

Dear Mr Chair,

On 10 January 2017, the Committee on Legal Affairs decided of its own motion, pursuant to Rule 39(3) of the Rules of Procedure, to provide an opinion as to whether the legal basis proposed by the Commission, namely Article 50(1) TFEU, constitutes the correct legal basis of the proposal for a directive of the European Parliament and of the Council amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches or, on the contrary, the proposal should have been based on a different legal basis such as Article 115 TFEU.

I. Background

On 12 April 2016, the Commission adopted a proposal for an amendment to Directive 2013/34/EU (‘the Accounting Directive’)[1]. The proposal imposes on EU and non-EU multinational groups with global revenues exceeding 750 million euros a year an obligation to draw up and publish annual income tax reports.

According to the Explanatory Memorandum to the proposal, a healthy Single Market requires that companies should pay taxes in the country where profits are generated. The phenomenon of aggressive tax planning undermines this principle. The Commission considers that public scrutiny can help to combat this practice. Furthermore, the Commission explains that the proposal complements undertakings’ current financial reporting requirements and does not interfere with these requirements in relation to their financial statements.

II. The relevant Treaty Articles

The legal basis proposed by the Commission is Article 50(1) TFEU. Articles 50(1) and 50(2)(g) TFEU read as follows:

Article 50

(ex Article 44 TEC)

1. In order to attain freedom of establishment as regards a particular activity, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee, shall act by means of directives.

2. The European Parliament, the Council and the Commission shall carry out the duties devolving upon them under the preceding provisions, in particular:

(...)

(g) by coordinating to the necessary extent the safeguards which, for the protection of the interests of members and others, are required by Member States of companies or firms within the meaning of the second paragraph of Article 54 with a view to making such safeguards equivalent throughout the Union;(...)

Article 115 TFEU reads as follows:

Article 115

(ex Article 94 TEC)

Without prejudice to Article 114, the Council shall, acting unanimously in accordance with a special legislative procedure and after consulting the European Parliament and the Economic and Social Committee, issue directives for the approximation of such laws, regulations or administrative provisions of the Member States as directly affect the establishment or functioning of the internal

market.

III. The case law on legal basis

The choice of legal basis is important because the Union is constitutionally founded upon the principle of conferral of competences and its institutions can only act in a manner consistent with the mandate provided to them by the Treaty[2]. Therefore, the choice of a legal basis is not discretionary.

Certain principles emerge from the case law of the Court of Justice as regards the choice of legal bases. First, in view of the consequences of the legal basis in terms of substantive competence and the procedure, the choice of the correct legal basis is of constitutional importance[3]. Secondly, the choice of legal basis for an EU measure must rest on objective factors that are amenable to judicial review; these include, in particular, the aim and content of that measure[4]. The fact that an institution wishes to participate more fully in the adoption of a given measure, the work carried out in other respects in the sphere of action covered by the measure and the context in which the measure was adopted are all irrelevant.[5]

The choice of an incorrect legal basis may therefore justify the annulment of the act in question

[6].

IV. The aim and content of the proposed regulation

It is clear from the recitals to the proposal that its aim is to enhance transparency and public scrutiny of corporate income tax and to foster corporate responsibility by imposing disclosure requirements on certain companies regarding their income tax.

Recital 12 to the proposal states that the directive aims to enhance transparency and public scrutiny of corporate income tax by adapting the existing legal framework concerning the obligations imposed on companies and firms in respect of the publication of reports, for the protection of the interest of members and others, within the meaning of Article 50(2)(g) TFEU.

Pursuant to recital 5, enhanced public scrutiny of corporate income taxes borne by multinational undertakings carrying out activities in the Union is an essential element further to foster corporate responsibility, to contribute to welfare through taxes, to promote fairer tax competition within the Union through better informed public debate and to restore public trust in the fairness of the national tax systems. Such public scrutiny can be achieved by means of a report on income tax information.

Recital 9 explains how the information provided in the report should be broken down by Member States in order to ensure a level of detail that enables citizens better to assess the contribution of multinational undertakings to welfare in each Member State.

Recital 10 explains the responsibility regime of the members of the administrative, management and supervisory bodies established in the proposed directive in order to strengthen responsibility vis-à-vis third parties and to ensure appropriate governance.

Recital 11 establishes an obligation for the auditors or audit firms regarding the verification of whether the report was submitted and presented in accordance with the requirements of the proposed directive, with the aim of ensuring that cases of non-compliance are disclosed to the public.

The content of the proposed directive primarily consists of an obligation for large companies and branches to draw up a report on income tax information containing general information broken down by country, which is to be published in a register and on the website of the company. The content of the proposal confirms its aim of enhancing transparency, public scrutiny and corporate responsibility.

In order to achieve the aim mentioned above, the Commission proposes to insert a new chapter in the Accounting Directive (Chapter 10a). It requires all EU undertakings and branches of non-EU undertakings operating in the EU having a consolidated turnover exceeding EUR 750 000 000 to draw up and publish a report on income tax information on an annual basis (Article 48b).

The information to be included in the report concerns the nature of the activities, the number of employees, the net turnover made (including turnover made with third parties and between companies within a group), the profit or loss made before income tax, the amount of corporation tax due on the profits made in the current year, the amount of corporation tax already paid during that year, and the accumulated earnings (Article 48c (2)).

The information provided must be broken down on a country-by-country basis for each Member State in which the undertaking operates and each jurisdiction that is listed on a “Common Union list of certain tax jurisdictions”, and on an aggregated basis for the rest of the world (Article 48c(3) and Article 48g).

The report is to be published in a business register and remain accessible on the website of the undertaking for at least five consecutive years (Article 48d).

V. Determination of the appropriate legal basis

Article 50(1) TFEU provides the legislature with a legal basis to adopt, through the ordinary legislative procedure, directives to attain freedom of establishment as regards a particular activity. Article 50(2) TFEU contains a non-exhaustive list of instances where, in particular, this legal basis applies. For the present purposes, Article 50(2)(g) TFEU is of interest, as it provides that the legislature shall carry out the duties devolving upon them as regards the right of establishment, “(...) by coordinating to the necessary extent the safeguards which, for the protection of the interests of members and others, are required by Member States of companies or firms within the meaning of the second paragraph of Article 54 TFEU with a view to making such safeguards equivalent throughout the Union.”

A significant number of company law directives have been adopted on that legal basis, with the aim of protecting the interests of members and others[7], including where this involves disclosure requirements, and more particularly public disclosure[8].

In a similar vein, and as it has already been described in detail in section IV of this note, the aim and content of this proposal is essentially to enhance public scrutiny of corporate income taxes borne by multinational undertakings carrying out activities in the Union by requiring companies as of a certain annual turnover threshold to draw up and make public annual income tax reports.

More specifically, according to recital 12, the aim of the proposal is “to enhance transparency and public scrutiny of corporate income tax by adapting the existing legal framework concerning the obligations imposed on companies and firms in respect of the publication of reports, for the protection of the interests of members and others, within the meaning of Article 50(2)(g)TFEU”.

The proposed directive thus considers that a link exists between transparency and public scrutiny, which are the aims it pursues, and the interests of “members and others”, which are the beneficiaries of the safeguards to be adopted on the basis of Article 50(2)(g) TFEU. This suggests (i) that the terms “members and others” extends to the public at large and thus beyond those specifically in contractual or pre-contractual relations with a company, or directly affected by its business, and (ii) that the proposal indeed serves interests of those “members and others”. In doing so, the proposed directive remains fully in harmony with the disclosure requirements already laid down in Directive 2013/34.

It should be then examined in light of the above (i) whether the terms “members and others” in Article 50(2)(g) TFEU can extend to the public and (ii) whether the proposal protects in fact the interest of members and others thus defined.

As to the first question, it can be concluded that, according to the case law of the Court of Justice, the concept of “others” as used in Article 50(2)(g) is not restricted to persons in direct contractual or pre-contractual relations with a company, but that it extends, inter alia, to competitors of the companies or firms in question, and more broadly to the public.

In accordance with the Court’s judgment in the case Verband deutscher Daihatsu-Händler, to which recital 12 of the proposed directive refers, the term “others” is to be understood widely:

“[The very wording of] Article 50(2)(g)TFEU refers to the need to protect the interests of ‘others’ generally, without distinguishing or excluding any categories falling within the ambit of that terms” (emphasis added).[9]

The Court added that this literal interpretation was confirmed by the objective of abolishing restrictions of freedom of establishment “which is assigned in very broad terms (...)” by the Treaty.[10]

In that judgment, the Court held that Article 50(2)(g) TFEU was an appropriate legal basis to require provision of information for all third parties who do not know or cannot obtain sufficient knowledge of the company’s accounting and financial situation.[11]

In

Axel Springer the Court stated that “[T]he ‘others’ referred to in that Article includes all third parties.”[12]

In its judgment in the case Texdata Software GmbH, the Court further recognised that there is no requirement that the protection of “others” be somehow subsidiary or ancillary to those of “members”. Thus even disclosure provisions “(...) primarily designed to provide information for third parties who do not know or cannot obtain sufficient knowledge of the company’s accounting and financial situation” come within the scope of Article 50(2)(g) TFEU. [13]

With regard to the issue whether the proposal protects in fact the interest of the public, it should be recalled in the first place that the public is the beneficiary of companies’ compliance with tax laws and avoidance of undue profit shifting, as welfare and security for the public is implemented through public policies largely financed by taxes.

Secondly, public availability of corporate income tax information in each Member State will enable public scrutiny of compliance with tax laws, as well as a societal and political debate on the proper tax levels (base and rate), including when comparing rates to those in other tax jurisdiction in the Union. This in turn, arguably, is likely to dissuade in particular large companies that depend on their reputation as part of their brand name from contravening or otherwise avoiding tax laws.

The protection thus afforded to the public also come within the range of the term “interest” within the meaning of Article 50(2)(g) which the Court, following the same logic as for the definition of “others”, considers widely. In particular, the term does not require a right, nor a specific interest of a third party directly in relation to a company’s business or activities, to be affected.[14]

It thus appears to be a consistent proposition that the public’s interests would also be protected by availability to them of large companies’ income tax information in the Member States, within the scope of Article 50(2)(g) TFEU.

It must therefore be concluded that, in coordinating the existing legal framework concerning the obligations imposed on companies and branches in respect of the publication of income tax information for the protection of the interest of members and others, the proposal’s aim and content correspond to Article 50(1) TFEU. This conclusion is not undermined by the fact that tax authorities will indirectly benefit from this transparency obligation. In any event, contrary to Article 114(2) TFEU, Articles 50 et seq. TFEU do not contain a carve-out for fiscal provisions.

There is, moreover, no more specific legal basis than Article 50(1) TFEU in the light of Article 50(2)(g) TFEU available in the Treaties. In particular, the entire system of general internal market harmonisation constituted by Articles 114 and 115 TFEU is explicitly made subsidiary to other applicable legal bases and therefore does not apply here, regardless of whether the carve-out clause of Article 114(2) TFEU would otherwise allow recourse to Article 115 TFEU (Article 115 TFEU is “without prejudice to Article 114”, which in turn applies “save where otherwise provided in the Treaties”). [15]

The availability of Article 50(1) TFEU as a legal basis excludes Articles 114 and 115 TFEU, but, for the sake of completeness, it seems convenient to provide a brief analysis of the proposal in light of Article 115 TFEU. Article 115 TFEU empowers the Council to issue directives for the approximation of such laws, regulations or administrative provisions of the Members States as directly affect the establishment or functioning of the internal market. In contrast to Article 114 TFEU it contains no exclusion of fiscal provisions. It may therefore be used as legal basis for legislative acts in the field of direct taxation,[16] provided that the national laws to be harmonised have a direct impact on the internal market so as to make the harmonisation necessary.

Although the current proposal is politically linked to Council Directive (EU) 2016/881 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation[17], adopted by the Council on 25 May 2016, the aim and content of both instruments are different. Directive 2016/881 is based on Articles 113 and 115 TFEU. It is apparent that its purpose is to improve cooperation between the tax authorities of the Member States. It coordinates the transfer of information between the competent authorities by imposing certain obligations on Member States. [18] In addition, it requires EU tax authorities to exchange 12 pieces of information, some of which contain confidential business information. In contrast with this, the purpose of the current proposal of the Commission is not to improve administrative cooperation of tax authorities but to enhance transparency and public scrutiny on corporate income tax and to foster corporate responsibility by imposing on certain companies disclosure requirements regarding their income tax. Apart from the amount of taxes paid, the proposal for public country-by-country reporting requires that MNEs disclose six other pieces of information in order to ensure a level of detail that will enable citizens to better assess how MNEs contribute to welfare in each Member State.

VI. Conclusion

In the light of the foregoing analysis, Article 50(1) TFEU constitutes the appropriate legal basis for the proposal for a directive of the European Parliament and of the Council amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches.

At its meeting of 12 January 2017 the Committee on Legal Affairs accordingly decided, by 10 votes in favour and one abstention[19], that Article 50(1) TFEU constitutes the appropriate legal basis for the proposal for a directive of the European Parliament and of the Council amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches.

Yours sincerely,

Pavel Svoboda

• [1]  Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p.19).
• [2]  Opinion 2/00 of 6 December 2001, Cartagena Protocol, EU:C:2001:664, para. 3; Opinion 1/08 of 30 November 2009, General Agreement on Trade in Services, EU:C:2009:739, para. 110.
• [3]  Opinion 2/00 of 6 December 2001, Cartagena Protocol, EU:C:2001:664, para. 5; Opinion 1/08 of 30 November 2009, General Agreement on Trade in Services, EU:C:2009:739, para. 110.
• [4]  See, among others, judgment of 25 February 1999, European Parliament v Council, Joined Cases C-164/97 and C-165/97, EU:C:1999:99, para 16; judgment of 30 January 2001, Spain v Council, Case C-36/98, EU:C:2001:64, para 59; judgment of 12 December 2002, Commission v Council, Case C-281/01, EU:C:2002:761, paras 33-49; judgment of 29 April 2004, Commission v Council, Case C-338/01, EU:C:2004:253, para 55.
• [5]  See judgment of 4 April 2000, Commission v Council, Case C-269/97, EU:C:2000:183, para 44.
• [6]  Opinion 2/00 of 6 December 2001, Cartagena Protocol, EU:C:2001:664, para. 5.
• [7]  See, in particular, the sixth, eleventh and twelfth company law Directives 82/891/EEC (OJ L 378, 31.12.1982, p. 47), 89/666/EEC (OJ L 395, 30.12.1989, p. 36) and 89/667/EEC (OJ L 395, 30.12.1989, p.40) respectively; Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts (OJ L 157, 9.6.2006, p. 87); Directive 2007/36/EC on the exercise of certain rights of shareholders in listed companies (OJ L 184, 14.7.2007, p. 17), Directive 2011/35/EU concerning mergers of public limited liability companies (OJ L 110, 29.4.2011, p.1), Directive 2012/30/EU on coordination of safeguards concerning capital requirements for public companies (OJ L 315, 14.11.2012, p. 74).
• [8]  Directive 2009/101/EC on coordination of safeguards which, for the protection of the interests of members and third parties, are required by Member States of companies within the meaning of the second paragraph of Article 48 of the Treaty, with a view to making such safeguards equivalent (OJ L 258, 1.10.2009, p. 11).
• [9]  Judgment of 4 December 1997, Verband deutscher Daihatsu-Händler v Daihatsu Deutschland GmbH, Case C-97/96, EU:C:1997:581, para 19.
• [10]  Ibid., para 21.
• [11]  Ibid., para 20.
• [12]  Order of 23 September 2004, Axel Springer AG, Joined Cases C-435/02 and C-103/03, EU:C:2004:552, para 34.
• [13]  Judgement of 26 September 2013, Texdata Software GmbH, Case C-418/11, EU:C:2013:588, para 54.
• [14]  Axel Springer AG, supra, para 35.
• [15]  See judgment of 29 April 2004, Commission v Council, Case C-338/01, EU:C:2004:253, paras 59-60.
• [16]  For matters of indirect taxation, Article 113 TFEU is the more specific legal basis.
• [17]  OJ L 146, 3.6.2016, p. 8.
• [18]  In this respect, see judgment of 27 September 2007, Twoh International, Case C-184/05, EU:C:2007:550, para 31.
• [19]  The following were present for the final vote: Joëlle Bergeron, Daniel Buda, Jean-Marie Cavada (rapporteur), Sergio Gaetano Cofferati, Therese Comodini Cachia, Angel Dzhambazki, Heidi Hautala, Constance Le Grip, Gilles Lebreton, Evelyn Regner, Tadeusz Zwiefka .

OPINION of the Committee on Development (28.4.2017)

for the Committee on Economic and Monetary Affairs and the Committee on Legal Affairs

on the proposal for a directive of the European Parliament and of the Council amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches
(COM(2016)0198 – C8-0146/2016 – 2016/0107(COD))

Rapporteur: Elly Schlein

SHORT JUSTIFICATION

The European Parliament has long been calling for public Country-by-Country Reporting as a key instrument for tackling international tax evasion and tax avoidance effectively. Transparency is an essential element; public disclosure of relevant tax information by multinational corporations could be a game-changer, and not only for Europe. Corporate tax revenues constitute a significant share of developing countries’ national income, meaning that they are particularly affected by corporate tax avoidance. For example, according to the findings of the African Union’s high level panel on illicit financial flows, the African continent loses annually over $50-billion through these illicit financial outflows.

However, the Commission´s proposal as it stands falls short of what is needed to completely lift the veil of opacity that allows multinational companies to avoid taxes in some of the world’s poorest countries. The obligation to report on a country-by-country basis only inside the EU, while publishing aggregated data from all third countries, makes the proposal unfit for purpose and useless for developing countries, as they would not be able to get any country-specific information. Apart from failing to effectively tackle tax dodging, the current proposal would also stand in stark contrast to the EU’s commitment to Policy Coherence for Development.

The Rapporteur calls for non-aggregated data to also be disclosed from all third countries in which multinationals operate, effectively helping developing countries in their fight against tax dodging and in raising adequate public revenue. Moreover, a lower threshold for companies covered by the reporting would provide more data on the activities of multinationals, and some important disclosure elements (such as assets and sales) should also be included to give a clear picture of the activities of companies worldwide.

The Panama Papers scandal clearly demonstrates how tax evasion and tax avoidance represent global problems that can only be addressed through a global response, and how half-hearted attempts to tackle them are doomed to fail. Only with a strong commitment to fair taxation and coherence between EU policies will it be possible to effectively fight poverty and inequalities in Europe and worldwide.

AMENDMENTS

The Committee on Development calls on the Committee on Economic and Monetary Affairs and the Committee on Legal Affairs, as the committees responsible, to take into account the following amendments:

Amendment     1 Proposal for a directive Recital 6
Text proposed by the Commission	Amendment
(6)  The public should be able to scrutinise all the activities of a group when the group has certain establishments within the Union. For groups which carry out activities within the Union only through subsidiary undertakings or branches, subsidiaries and branches should publish and make accessible the report of the ultimate parent undertaking. However for reasons of proportionality and effectiveness, the obligation to publish and make accessible the report should be limited to medium-sized or large subsidiaries established in the Union, or branches of a comparable size opened in a Member State. The scope of Directive 2013/34/EU should therefore be extended accordingly to branches opened in a Member State by an undertaking which is established outside the Union.	(6)  The public should be able to scrutinise all the activities of a group when the group has certain establishments within and outside the Union. Multinational undertakings are operating worldwide and their corporate behaviour has a substantial impact on developing countries, which are particularly affected by corporate tax avoidance. Meaningful disaggregated public country-by-country reporting from each country and jurisdiction of operation is essential in order to allow citizens, public authorities and legislators from those countries to effectively monitor those undertakings’ activities and to tackle tax dodging. By making the information public, the Union would increase its policy coherence for development and limit potential tax avoidance schemes in countries where domestic resources mobilization has been identified as a key component of Union development policy and as an indispensable means of achieving the objectives of the 2030 Agenda for Sustainable Development.
Amendment     2 Proposal for a directive Recital 6 a (new)
Text proposed by the Commission	Amendment
	(6a)  To ensure policy coherence for development, the Union should effectively commit to enhancing transparency in tax matters as part of its efforts to increase financing development in the Addis Ababa Action Agenda of the Third International Conference on Financing for Development.
Amendment    3 Proposal for a directive Recital 9
Text proposed by the Commission	Amendment
(9)  In order to ensure a level of detail that enables citizens to better assess the contribution of multinational undertakings to welfare in each Member State, the information should be broken down by Member State. Moreover, information concerning the operations of multinational enterprises should also be shown with a high level of detail as regards certain tax jurisdictions which pose particular challenges. For all other third country operations, the information should be given in an aggregate number.	(9)  In order to ensure a level of detail that enables citizens to better assess the contribution of multinational undertakings to welfare in each jurisdiction in which they operate, both within and outside the Union, the information should be broken down by jurisdiction.
Amendment     4 Proposal for a directive Recital 9 a (new)
Text proposed by the Commission	Amendment
	(9a)  Member States should ensure that an adequate level of human, technical and financial resources is dedicated within tax administrations to the automatic exchange of information and data processing and to the fight against tax fraud and tax avoidance. Developed country governments should commit to exchanging information automatically with developing countries by establishing the necessary bilateral exchange relationships.
Amendment     5 Proposal for a directive Recital 9 b (new)
Text proposed by the Commission	Amendment
	(9b)  In order to assist developing countries in improving the capacity of their tax administrations, Member States should assist them by sharing know-how and best practices.
Amendment     6 Proposal for a directive Recital 9 c (new)
Text proposed by the Commission	Amendment
	(9c)  When supporting developing countries in capacity building, special emphasis should be given to efficient online platform solutions that avoid bureaucratic hurdles, in particular for small and medium-sized enterprises.
Amendment    7 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48b – paragraph 1 – subparagraph 1
Text proposed by the Commission Amendment Member States shall require ultimate parent undertakings governed by their national laws and having a consolidated net turnover exceeding EUR 750 000 000 as well as undertakings governed by their national laws that are not affiliated undertakings and having a net turnover exceeding EUR 750 000 000 to draw up and publish a report on income tax information on an annual basis. Member States shall require ultimate parent undertakings of large groups as defined in Article 3(7), governed by their national laws, and of large undertakings as defined in Article 3(4), governed by their national laws that are not affiliated undertakings to draw up and publish a report on income tax information on an annual basis.
Amendment    8 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48b – paragraph 1 – subparagraph 2
Text proposed by the Commission Amendment The report on income tax information shall be made accessible to the public on the website of the undertaking on the date of its publication. The report on income tax information shall be published in a common template available in an open data format and made accessible to the public on the website of the undertaking on the date of its publication in at least one of the official languages of the Union. On the date of publication of the report on income tax information, the undertaking shall also file the report in a public registry managed by the Commission.
Amendment    9 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48b – paragraph 3 – subparagraph 1
Text proposed by the Commission Amendment Member States shall require the medium-sized and large subsidiary undertakings referred to in Article 3(3) and (4) which are governed by their national laws and controlled by an ultimate parent undertaking which has a consolidated net turnover exceeding EUR 750 000 000 and which is not governed by the law of a Member State, to publish the report on income tax information of that ultimate parent undertaking on an annual basis. Member States shall require subsidiary undertakings which are governed by their national laws and controlled by an ultimate parent undertaking which has a consolidated net turnover exceeding EUR 40 000 000 and which is not governed by the law of a Member State, to publish the report on income tax information of that ultimate parent undertaking on an annual basis.
Amendment    10 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48b – paragraph 3 – subparagraph 2
Text proposed by the Commission Amendment The report on income tax information shall be made accessible to the public on the date of its publication on the website of the subsidiary undertaking or on the website of an affiliated undertaking. The report on income tax information shall be published in a common template available in an open data format and made accessible to the public on the date of its publication on the website of the subsidiary undertaking or on the website of an affiliated undertaking in at least one of the official languages of the Union. On the date of publication of the report on income tax information, the undertaking shall also file the report in a public registry managed by the Commission.
Amendment    11 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48b – paragraph 4 – subparagraph 2
Text proposed by the Commission Amendment The report on income tax information shall be made accessible to the public on the date of its publication on the website of the branch or on the website of an affiliated undertaking. The report on income tax information shall be published in a common template available in an open data format and made accessible to the public on the date of its publication on the website of the branch or on the website of an affiliated undertaking in at least one of the official languages of the Union. On the date of publication of the report on income tax information, the undertaking shall also file the report in a public registry managed by the Commission.
Amendment    12 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48b – paragraph 5
Text proposed by the Commission Amendment 5.   Member States shall apply the rules set out in paragraph 4 only to a branch where the following criteria are met: 5.   Member States shall apply the rules set out in paragraph 4 only to a branch where the undertaking which opened the branch is either an affiliated undertaking of a group which is controlled by an ultimate parent undertaking not governed by the law of a Member State and which has a consolidated net turnover exceeding EUR 40 000 000 or an undertaking that is not an affiliated and which has a net turnover exceeding EUR 40 000 000. (a)  the undertaking which opened the branch is either an affiliated undertaking of a group which is controlled by an ultimate parent undertaking not governed by the law of a Member State and which has a consolidated net turnover exceeding EUR 750 000 000 or an undertaking that is not an affiliated and which has a net turnover exceeding EUR 750 000 000;   (b)   the ultimate parent undertaking referred to in point (a) does not have a medium-sized or large subsidiary undertaking as referred to in paragraph 3.
Amendment    13 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 2 – point a
Text proposed by the Commission Amendment (a)  a brief description of the nature of the activities; (a)  name or names, a brief description of the nature of the activities and the geographical location;
Amendment    14 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 2 – point b
Text proposed by the Commission Amendment (b)  the number of employees; (b)  the number of employees employed on a full-time equivalent basis;
Amendment    15 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 2 – point b a (new)
Text proposed by the Commission Amendment   (ba)  the value of assets and annual cost of maintaining those assets;
Amendment    16 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 2 – point b b (new)
Text proposed by the Commission Amendment   (bb)  sales and purchases;
Amendment    17 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 2 – point b c (new)
Text proposed by the Commission Amendment   (bc)  the value of investments by tax jurisdiction;
Amendment    18 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 2 – point c
Text proposed by the Commission Amendment (c)  the amount of the net turnover, which includes the turnover made with related parties; (c)  the amount of the net turnover, including a subdivision between the turnover made with related parties and the turnover made with unrelated parties;
Amendment    19 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 2 – point f a (new)
Text proposed by the Commission Amendment   (fa)  stated capital;
Amendment    20 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 2 – point f b (new)
Text proposed by the Commission Amendment   (fb)  tangible assets other than cash or cash equivalents;
Amendment    21 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 2 – point g a (new)
Text proposed by the Commission Amendment   (ga)  public subsidies received;
Amendment    22 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 2 – point g b (new)
Text proposed by the Commission Amendment   (gb)  the list of subsidiaries operating in each tax jurisdiction both inside and outside the Union;
Amendment    23 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 2 – point g c (new)
Text proposed by the Commission Amendment   (gc)  all payments, as defined in Article 41(5), made to governments on an annual basis.
Amendment    24 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 3 – subparagraph 1
Text proposed by the Commission Amendment The report shall present the information referred to in paragraph 2 separately for each Member State. Where a Member State comprises several tax jurisdictions, the information shall be combined at Member State level. The report shall present the information referred to in paragraph 2 separately for each Member State. Where a Member State comprises several tax jurisdictions, the information shall be listed separately for each tax jurisdiction.
Amendment    25 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 3 – subparagraph 2
Text proposed by the Commission Amendment The report shall also present the information referred to in paragraph 2 of this Article separately for each tax jurisdiction which, at the end of the previous financial year, is listed in the common Union list of certain tax jurisdictions drawn up pursuant to Article 48g, unless the report explicitly confirms, subject to the responsibility referred to in Article 48e below, that the affiliated undertakings of a group governed by the laws of such tax jurisdiction do not engage directly in transactions with any affiliated undertaking of the same group governed by the laws of any Member State. The report shall also present the information referred to in paragraph 2 separately for each tax jurisdiction outside the Union.
Amendment    26 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 3 – subparagraph 3
Text proposed by the Commission Amendment The report shall present the information referred to in paragraph 2 on an aggregated basis for other tax jurisdictions. deleted
Amendment    27 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48c – paragraph 5
Text proposed by the Commission Amendment 5.  The report on income tax information shall be published and made accessible on the website in at least one of the official languages of the Union. 5.  The report on income tax information shall be published in a common template available in an open data format and made accessible on the website in at least one of the official languages of the Union. On the date of publication of the report on income tax information, the undertaking shall also file the report in a public registry managed by the Commission.
Amendment    28 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48e – paragraph 2
Text proposed by the Commission Amendment 2.  Member States shall ensure that the members of the administrative, management and supervisory bodies of the subsidiary undertakings referred to in Article 48b(3) of this Directive and the person(s) designated to carry out the disclosure formalities provided for in Article 13 of Directive 89/666/EEC for the branch referred to in Article 48b(4) of this Directive, acting within the competences assigned to them by national law, have collective responsibility for ensuring that, to the best of their knowledge and ability, the report on income tax information is drawn up, published and made accessible in accordance with Articles 48b, 48c and 48d. 2.  Member States shall ensure that the members of the administrative, management and supervisory bodies of the subsidiary undertakings referred to in Article 48b(3) of this Directive and the person(s) designated to carry out the disclosure formalities provided for in Article 13 of Directive 89/666/EEC for the branch referred to in Article 48b(4) of this Directive, acting within the competences assigned to them by national law, have collective responsibility for ensuring that the report on income tax information is drawn up, published and made accessible in accordance with Articles 48b, 48c and 48d.
Amendment    29 Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2013/34/EU Article 48g a (new)
Text proposed by the Commission Amendment   Article 48ga   Common template for the report   The Commission shall be empowered to adopt implementing acts to set up the common template referred to in Article 48b(1), (3) and (4) and Article 48c(5). Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 50(2).

ANNEX: LIST OF ENTITIES OR PERSONSFROM WHOM THE RAPPORTEUR FOR THE OPINION HAS RECEIVED INPUT

The following list is drawn up on a purely voluntary basis under the exclusive responsibility of the rapporteur for the opinion. The rapporteur has received input from the following entities or persons in the preparation of the opinion:

Entity and/or person
Oxfam
Eurodad
ActionAid

PROCEDURE – COMMITTEE ASKED FOR OPINION

Title	Disclosure of income tax information by certain undertakings and branches
References	COM(2016)0198 – C8-0146/2016 – 2016/0107(COD)
Committees responsible Date announced in plenary	ECON 28.4.2016	JURI 28.4.2016
Opinion by Date announced in plenary	DEVE 28.4.2016
Rapporteur Date appointed	Elly Schlein 16.9.2016
Rule 55 – Joint committee procedure Date announced in plenary	19.1.2017
Discussed in committee	21.3.2017
Date adopted	25.4.2017
Result of final vote	+: –: 0:	21 1 0
Members present for the final vote	Beatriz Becerra Basterrechea, Nirj Deva, Doru-Claudian Frunzulică, Enrique Guerrero Salom, Heidi Hautala, György Hölvényi, Teresa Jiménez-Becerril Barrio, Arne Lietz, Linda McAvan, Norbert Neuser, Vincent Peillon, Cristian Dan Preda, Elly Schlein, Eleftherios Synadinos, Eleni Theocharous, Paavo Väyrynen, Bogdan Brunon Wenta, Anna Záborská, Željana Zovko
Substitutes present for the final vote	Paul Rübig, Judith Sargentini
Substitutes under Rule 200(2) present for the final vote	Xabier Benito Ziluaga, Dariusz Rosati

FINAL VOTE BY ROLL CALL IN COMMITTEE ASKED FOR OPINION

21	+
ALDE Group	Paavo Väyrynen
ECR Group	Nirj Deva, Eleni Theocharous
GUE/NGL Group	Xabier Benito Ziluaga
PPE Group	György Hölvényi, Teresa Jiménez-Becerril Barrio, Cristian Dan Preda, Dariusz Rosati, Paul Rübig, Bogdan Brunon Wenta, Anna Záborská, Željana Zovko,
S&D Group	Doru-Claudian Frunzulică, Enrique Guerrero Salom, Arne Lietz, Linda McAvan, Norbert Neuser, Vincent Peillon, Elly Schlein
Verts/ALE Group	Heidi Hautala, Judith Sargentini

1	-
NI	Eleftherios Synadinos

0	0

Key to symbols:

+  :  in favour

-  :  against

0  :  abstention

PROCEDURE – COMMITTEE RESPONSIBLE

Title	Disclosure of income tax information by certain undertakings and branches
References	COM(2016)0198 – C8-0146/2016 – 2016/0107(COD)
Date submitted to Parliament	12.4.2016
Committees responsible Date announced in plenary	ECON 28.4.2016	JURI 28.4.2016
Committees asked for opinions Date announced in plenary	AFET 28.4.2016	DEVE 28.4.2016	INTA 28.4.2016
Not delivering opinions Date of decision	AFET 30.5.2017	INTA 23.5.2016
Rapporteurs Date appointed	Hugues Bayet 15.6.2016	Evelyn Regner 15.6.2016
Rule 55 – Joint committee procedure Date announced in plenary	19.1.2017
Legal basis disputed Date of JURI opinion	JURI 12.1.2017
Discussed in committee	27.2.2017	3.5.2017
Date adopted	12.6.2017
Result of final vote	+: –: 0:	38 9 36
Members present for the final vote	Max Andersson, Gerolf Annemans, Burkhard Balz, Hugues Bayet, Joëlle Bergeron, Udo Bullmann, Jean-Marie Cavada, Thierry Cornillet, Esther de Lange, Rosa Estaràs Ferragut, Markus Ferber, Jonás Fernández, Laura Ferrara, Lidia Joanna Geringer de Oedenberg, Sven Giegold, Roberto Gualtieri, Brian Hayes, Gunnar Hökmark, Mary Honeyball, Danuta Maria Hübner, Cătălin Sorin Ivan, Petr Ježek, Sajjad Karim, Sylvia-Yvonne Kaufmann, Georgios Kyrtsos, Alain Lamassoure, Philippe Lamberts, Werner Langen, Gilles Lebreton, Sander Loones, Bernd Lucke, Olle Ludvigsson, António Marinho e Pinto, Gabriel Mato, Bernard Monot, Luigi Morgano, Luděk Niedermayer, Stanisław Ożóg, Sirpa Pietikäinen, Emil Radev, Evelyn Regner, Dariusz Rosati, Pirkko Ruohonen-Lerner, Pedro Silva Pereira, Peter Simon, Theodor Dumitru Stolojan, Pavel Svoboda, József Szájer, Paul Tang, Ernest Urtasun, Marco Valli, Tom Vandenkendelaere, Cora van Nieuwenhuizen, Miguel Viegas, Jakob von Weizsäcker, Axel Voss, Marco Zanni
Substitutes present for the final vote	Enrique Calvet Chambon, Matt Carthy, David Coburn, Manuel dos Santos, Pascal Durand, Ashley Fox, Heidi Hautala, Ramón Jáuregui Atondo, Victor Negrescu, Virginie Rozière, Andreas Schwab, Tibor Szanyi, Lieve Wierinck, Kosma Złotowski
Substitutes under Rule 200(2) present for the final vote	Martina Anderson, Dominique Bilde, Ana Gomes, Kateřina Konečná, Merja Kyllönen, Liadh Ní Riada, Elly Schlein, Kay Swinburne, Adam Szejnfeld, Róża Gräfin von Thun und Hohenstein, Bogdan Brunon Wenta, Željana Zovko
Date tabled	21.6.2017

FINAL VOTE BY ROLL CALL IN COMMITTEE RESPONSIBLE

38	+
PPE   ECR ALDE EFDD	Burkhard Balz, Rosa Estaràs Ferragut, Markus Ferber, Brian Hayes, Gunnar Hökmark, Danuta Maria Hübner, Georgios Kyrtsos, Alain Lamassoure, Werner Langen, Gabriel Mato, Luděk Niedermayer, Sirpa Pietikäinen, Emil Radev, Dariusz Rosati, Andreas Schwab, Theodor Dumitru Stolojan, Pavel Svoboda, Adam Szejnfeld, József Szájer, Róża Gräfin von Thun und Hohenstein, Tom Vandenkendelaere, Axel Voss, Bogdan Brunon Wenta, Željana Zovko, Esther de Lange Ashley Fox, Sajjad Karim, Bernd Lucke, Stanisław Ożóg, Kay Swinburne, Kosma Zlotowski Enrique Calvet Chambon, Jean-Marie Cavada, Thierry Cornillet, Petr Ježek, António Marinho e Pinto, Lieve Wierinck Joëlle Bergeron

9	-
GUE/NGL EFDD	Martina Anderson, Matt Carthy, Kateřina Konečná, Merja Kyllönen, Liadh Ní Riada, Miguel Viegas David Coburn, Laura Ferrara, Marco Valli

36	0
S&D   ECR ALDE VERTS/ALE ENF	Hugues Bayet, Udo Bullmann, Jonás Fernández, Lidia Joanna Geringer de Oedenberg, Ana Gomes, Roberto Gualtieri, Mary Honeyball, Cătălin Sorin Ivan, Ramón Jáuregui Atondo, Sylvia-Yvonne Kaufmann, Olle Ludvigsson, Luigi Morgano, Victor Negrescu, Evelyn Regner, Virginie Rozière, Elly Schlein, Pedro Silva Pereira, Peter Simon, Tibor Szanyi, Paul Tang, Manuel dos Santos, Jakob von Weizsäcker Sander Loones, Pirkko Ruohonen-Lerner Cora van Nieuwenhuizen Max Andersson, Pascal Durand, Sven Giegold, Heidi Hautala, Philippe Lamberts, Ernest Urtasun Gerolf Annemans, Dominique Bilde, Gilles Lebreton, Bernard Monot, Marco Zanni

Key to symbols:

+  :  in favour

-  :  against

0  :  abstention