EUROPE’S biggest firms, starting with banks, will have to publish detailed breakdowns of tax payments as soon as this summer, European commissioner Michel Barnier indicated yesterday.
Barnier, who is in charge of drafting business regulation, said yesterday that rules which will force banks to report their profits, taxes and subsidies by country from 2015 could be bought forward and will also now be extended to cover other companies.
It could be made law by simply amending the existing proposal on non-financial reporting, one European official said.
“We will expand these reporting obligations to large companies and groups,” Barnier said speaking in Amsterdam.
Although the extra burden will increase costs for firms, Barnier claims it is in their own financial interests to publish more information. “This is an asset for companies themselves. Experience shows that transparent companies have lower financing costs, attract and retain talented employees, and are more successful in the long term,” the commissioner said.
“Therefore, non-financial reporting can be part of Europe’s economic recovery. And it can improve European companies’ impact on the environment and societies across the globe.”
However firms have disagreed so far – Barnier notes less than 10 per cent of firms regularly publish this information.
Barnier’s stance comes amid a furore over the level of tax paid by some large corporations.
This week a US report into tech giant Apple found it paid little or no tax on tens of billions of dollars in profits channeled through Irish subsidiaries that were tax resident in no country.
The extent to which Apple had avoided taxes had not been made public because companies do not have to report revenues, profits or taxes on a national basis.
The EU agreed earlier this year to force European banks to report profit on a country-by-country basis as part of measures to ensure they hold enough capital.
The US and EU have also agreed to force mining and oil companies to publish tax and other payments to resource-rich nations, to reduce corruption.