EUROPEAN COMMISSION Brussels, 1.10.2021 COM(2021) 617 final 2016/0107(COD) COMMUNICATION FROM THE COMMISSION

TO THE EUROPEAN PARLIAMENT



pursuant to Article 294(6) of the Treaty on the Functioning of the European Union



concerning the position of the Council on the adoption of a Directive of the European Parliament and the Council amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches (Text with EEA relevance)



2016/0107 (COD) COMMUNICATION FROM THE COMMISSION

TO THE EUROPEAN PARLIAMENT



pursuant to Article 294(6) of the Treaty on the Functioning of the European Union



concerning the position of the Council on the adoption of a Directive of the European Parliament and the Council amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches (Text with EEA relevance) 1.Background Date of transmission of the proposal to the European Parliament and to the Council (document COM(2016)0198 – 2016/0107(COD)): 13 April 2016 Date of the opinion of the European Economic and Social Committee: 29 September 2016 Date of the position of the European Parliament, first reading: 27 March 2019 Date of transmission of the amended proposal: N/A Date of adoption of the position of the Council: 28 September 2021 2.Objective of the proposal from the Commission The proposal amends the Accounting Directive (Directive 2013/34/EU). It aims at enhancing transparency and public scrutiny on corporate income tax paid by multinational enterprise groups (consisting of their ultimate parent undertaking, subsidiaries and branches) and standalone multinational enterprises, hereafter referred to altogether as “MNE”, carrying out activities in the Union. This should foster greater corporate responsibility and transparency, promote a better informed public debate and help citizens in the Union regaining trust in the fairness of national tax systems. 3.Comments on the position of the Council The position of the Council reflects the political agreement reached between the European Parliament and the Council on 1 June 2021. The Commission supports this agreement. The main points of this agreement include the following: Scope As regards the scope of application, the political agreement introduces several changes compared to the initial Commission proposal: –It sets out that the reporting obligation applies only when companies exceeded the revenue threshold for two consecutive years (while Commission proposed one year). Symmetrically, the reporting obligation would cease to apply only when revenues have been below the threshold for two consecutive years; –It specifies the meaning of ‘revenues’ depending on the applicable accounting framework, for the purpose of determining whether an undertaking should report; –It includes in the scope of application standalone undertakings that are multinational but not part of any group; –It excludes from the scope of application groups that are not multinational. The scope of the political agreement retains the Commission proposal to impose the reporting on MNEs with consolidated revenues exceeding EUR 750 million. The exemption for credit institutions applying their specific country-by-country reporting regime is also retained. Safeguard clause In order to ensure that no disclosure of information is seriously prejudicial to the commercial position of an undertaking, a safeguard clause is introduced, allowing MNEs to omit the disclosure of commercially sensitive information for a period of five years.