12 April 2016 -Christian Aid today criticised Commission proposals as woefully inadequate, and as a cack handed attempt to tackle corporate tax avoidance.
'These proposals fly in the face of all that we know is needed to be done to tackle corporate tax avoidance', said Sorley McCaughey, Head of Advocacy and Policy at Christian Aid.
'If Panama confirmed anything for us, it is the importance of transparency, and full public country by country reporting was supposed to provide us with that. But these proposals cannot credibly be called country by country reporting, for the simple reason that companies are not being asked to report on a country by country basis.
'While multinational corporations will have to report on their activities in the EU and selected tax havens as defined by an EU blacklist, they will still be able to hide their profits in tax havens such as Switzerland and the US, which are unlikely to ever appear on any EU blacklist,' Mr. McCaughey continued.
'The proposals may even have the effect of encouraging companies to redirect their profits away from blacklisted jurisdictions, into new tax haven jurisdictions that don’t appear on the EU blacklist', said Mr. McCaughey.
The charity, which has been campaigning on the issue of public country by country reporting since 2007, also criticised the proposal to only include companies with a turnover of more than €750m euro.
‘Setting the threshold so high will, with one stroke, rule out more than 85% of multinational companies according to the OECD, making these proposals next to meaningless’.
The charity was also critical of the impact the proposals would have on developing countries who lose at least $100bn each year to tax dodging.
‘Real country by country reporting would allow developing countries to see the activities and tax payments of companies operating in their companies, and allow them to target meagre resources towards suspicious activities.
‘However, with the current proposal, there will not be any data on specific developing countries unless they are listed on the EU’s blacklist of tax havens. If some tax havens get listed and others don’t, multinational corporations will simply shift their profits into the unlisted tax havens.’
The charity also pointed to the fact that full public country by country reporting has already successfully been introduced for banks, while a similar requirement has also been introduced for the mining sector.
‘It’s exasperating that the Commission was able to move so effectively to introduce public country by country banks, but three years later, and numerous tax scandals and high profile leaks later, they seem unable to do the same again.’
The proposals will now be discussed and a compromise negotiated between the Commission, EU members states, and the European Parliament.
‘We will be calling on MEPs, in particular Irish MEPS, and the Irish government to introduce the necessary changes to these proposals, to strengthen them and make them fit for purpose,’ Mr McCaughey concluded.
For further information contact Barry Turley on (0044) 7734 256318, or Sorley McCaughey on 087 0620062.
Notes to editors:
1. 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.
2. 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.
3. 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
4. Follow Christian Aid Ireland on Twitter: twitter.com/christianaidirl
5. For more information about the work of Christian Aid, visit www.christianaid.ie