The FEE responded to the EC’s proposed introduction of a public Country-by-Country Reporting (CbCR) requirement applicable to Multinational Enterprises (MNEs) into the Accounting Directive 2013/34/EU. The FEE supports transparency and restoring trust in tax systems.
In last year’s consultation on corporate tax transparency, the FEE supported the principle of public CbCR as part of an international initiative. Since then the FEE has seen an increasing number of national developments in respect to CbCR, and believes that this makes the need to develop a truly international standard even more critical. All stakeholders must come together to develop a standard that provides consistent reporting requirements across the globe - informing stakeholders with meaningful data, keeping the costs of compliance for international businesses at a reasonable level, and reducing inconsistencies as well as risks of confusion.
The FEE believes that the legitimate public demand for greater transparency and information is best met by information that is relevant, understandable and trustworthy.
The potential audience for financial statements has increased significantly in recent years. In parallel, the complexity and volume of the information contained in the financial statements has expanded. CBCR information is no exception to this trend. It would therefore be advisable for companies and policy-makers to consider innovative means of presenting the public CBCR information, making full use of recent technological developments and new means of communication.
The FEE considers public CBCR in principle to be an appropriate means of ensuring greater transparency in businesses’ tax affairs and restoring public trust in the international tax infrastructure. A targeted, globally coordinated and proportionate public CBCR framework could be a valuable tool to deal with legitimate concerns stemming from civil society.
Like with other tax initiatives in past years, greatest effectiveness would be ensured through international coordinated initiatives. Therefore, the FEE would suggest that the EU improves international coordination in this field with relevant bodies such as the OECD, the UN, the IASB and the FASB.
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