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Christian Aid Ireland welcome new European Parliament tax transparency proposals for large multinationals, but warn that a dangerous loophole remains.

4 July 2017 - The European Parliament voted today in favour of public country by country reporting, but has voted to maintain the ‘corporate get out clause’ that allows multinationals to omit country by country reporting information when they have concerns about commercial sensitivities.

Christian Aid Head of policy and advocacy Sorley McCaughey welcomed the Parliament’s proposals but warned that the exemptions gravely damage EU efforts to introduce greater transparency from multinational companies.

‘While the European Parliament proposals will strengthen the rules on transparency for multinational corporations, it’s not the full transparency that is required’.

‘You can’t be partially committed to transparency, and where there are gaps in the system, you can be sure that there will be those who will try and exploit them. The complicated new corporate exemptions provides unscrupulous companies with every opportunity to continue dodging taxes, at the expense of societies across the globe’, Mr. McCaughey said.

The charity also warned against the possibility of these proposals being weakened further.

‘In the upcoming negotiations (between the Parliament, Commission, and member states), it will be crucial to ensure that the Parliament’s text is not weakened even further by member states opposed to transparency.

‘There are member states, including Ireland, who are opposed to making this kind of information public. We will be working hard over the coming months to convince Minister Donohue and his colleagues, that full transparency from companies is in the public interest, and allows for citizens, the media and civil society groups to hold companies to account for where and what they pay in taxes. This kind of information is crucial to rebuilding public trust in multinationals so badly damaged by recent scandals’. Mr. McCaughey concluded.

 

ENDS

 

For more information please contact:

Sorley McCaughey, Head of Advocacy & Policy, 2353 (0) 87 0620062 

or

Tess Purcell , Marketing and Communications Officer, 0353 (0) 87 6667808

or

Meabh Smith , Head of Communications, 0353 (0) 87 2068483

 

Notes to editors: 

  1. Background to the proposals:

    The European Commission first proposed new requirements for large multinationals with operations in the EU last year, which would introduce an obligation on large firms to publish data on their profits and taxes that they pay in each EU country on a country by country basis. The European Commission’s proposal only requires corporations to report on their EU operations and on their operations in countries included on a yet-to-be agreed EU list of tax haven jurisdictions, which means that multinational corporations would still be able to hide their profits in countries not included in the reporting requirements.

    While MEPs voted today to require multinationals to disclose this information for all countries in which they have operations worldwide, they also introduced a loophole for corporations, which provides them with the possibility to ask for exceptions to the disclosure of certain detailed information in countries when there are concerns about commercial confidentiality. These complicated new exemptions could potentially be exploited by multinational corporations looking to keep profits hidden in tax havens. The result is that citizens, journalists, civil society organisations and parliamentarians may not be able to get the necessary information that they need to identify multinational corporations dodging taxes.

    The European Union has already introduced a system of public country by country reporting for the banking sector, and EU banks are already required to disclose key data for all of their operations worldwide. This system is already working well and there currently is no exemption mechanism in place that provides banks with the possibility to exclude information on certain countries.

  2. Christian Aid works in some of the world's poorest communities in around 40 countries at any one time. We act where there is great need, regardless of religion, helping people to live a full life, free from poverty. We provide urgent, practical and effective assistance in tackling the root causes of poverty as well as its effects.

  3. Christian Aid’s core belief is that the world can and must be changed so that poverty is ended: this is what we stand for. Everything we do is about ending poverty and injustice: swiftly, effectively, and sustainably. Our strategy document ‘From Inspiration to Impact’ outlines how we set about this task.

  4. Christian Aid is a member of the ACT Alliance, a global coalition of more than 130 churches and church-related organisations that work together in humanitarian assistance, advocacy and development. Further details at http://actalliance.org

  5. Follow Christian Aid Ireland on Twitter: twitter.com/christianaidirl

  6. For more information about the work of Christian Aid, visit www.christianaid.ie


 

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